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Customer Relationship Innovation

Customer Relationship Innovation

There are many ways to innovate, but one of the most reliable is in the customer relationship. It’s reliable because you can quickly measure the impact of changes in the way you manage the relationship with your customers. You don’t even have to have a brilliant idea—your customers will often provide it for you (if you ask!).

Nordstrom’s is a great example of a retailer that has achieved differentiation through a unique approach to their customer relationship. Not only do they establish a customer-centric approach to doing business, but they specifically empower their salespeople to go out of their way to give customers a unique level of support and service. There are not many stores where you can return something you didn’t buy there, or where you can ask them to get something they don’t stock. At Nordstrom’s you can do either of these things, and they will try to help. Their personal shopper services are amazing, and lead to a very high level of customer satisfaction and loyalty.

This works because even though one instance of this level of support may be expensive, the cost of acquiring customers is higher, and the value of a loyal customer is higher still.

In this article I want to focus on one simple idea that will help you to differentiate in the customer relationship: it’s called the referenceability metric.

The idea is simple. Ask every customer this one question: “On a scale of 1 to 10, how likely are you to recommend our product / service to your peers?”

Then you score as follows:

  • 1–6 is taken as a no
  • 7–8 is taken as a maybe, or neutral response
  • 9–10 is considered a yes.

Ignore the neutral answers, and subtract the no count from the yes count. If your resulting score is positive, you’re in good shape.

This works because a customer who will recommend your offering is a real boost to sales. In fact, it’s been proven that companies with high referenceability grow significantly faster than those with lower referenceability.

Once you have a score, I recommend you ask the people who give you a low score what the key problems or causes of dissatisfaction are. By collecting this information you are in a position to fix the problems and improve satisfaction for the future. This one metric, coupled with a robust and honest approach to continuous improvement will result in innovation in the customer relationship, a higher referenceability score, and a faster growing business.


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