By Mark Helfen
Your relationship with your customers may be the one competitive advantage that can’t be copied.
Or so says Linda Sharp, CEO of Religence, a “customer-focused performance management consulting firm specializing in Customer Relationship Intelligence” according to the company web site.
Sharp will be the speaker at the upcoming SVForum Marketing and Social Media SIG meeting, on June 10. The meeting will be held at our now regular location, the Citrix Startup Accelerator (map here.) The meeting is titled “The Money is in Retention. Start There. Harvest GOLD in the BIG Data Blizzard,” but after my conversation, I could shortcut that to “a better understanding of your customer relationships leads to more profits from you customers.” As usual, meeting starts at 6:30.
Sharps method is to make measurement of customer relationships as close to a science as possible, creating a metric called “Relationship Value.” The atomic unit of the relationship is an interaction between you and your customer. An interaction can move the relationship forward or backward, but you will have no idea where things stand unless the information is tracked.
Tracking, managing, and improving your customer relationship value requires a person who has this as their primary responsibility, and Sharp recommends making relationship management a separate function and assigning someone the job – a customer relationship manager. This person makes tracking relationships a deliberate and proactive responsibility.
The task is made easier by widespread adoption of social media, along with more traditional internet connections like email. Where customer interactions were once ephemeral, possibly not recorded at all, they now form a “blizzard” of stored information, just needing that relationship manager and big data techniques to analyze and characterize all of the now collected digital data.
“The behavior of profitable customers is very different than the behavior of customers who aren’t,” said Sharp. But unless you start measuring the interactions, it’s hard to separate out the two. You may not get a precise numerical answer, but even a relative measurement can be enough. And just asking the right question can affect the value of your customer to you.
The outcome is a better understanding of your customer relationship. Analyzing interaction data can help identify patterns of behavior. Some patterns can indicate a customer that is interested in a close relationship. A different pattern can be an early warning of problems in the relationship.
Sharp has an interesting view of how relationship management, and tracking relationship value, affects marketing getting their “rightful place at the management table”: In analyzing the competitive advantages of a business, control of resources is managed by finance. The businesses economy of scale is owned by operations. Technology advantage is owned by Information Technology. But if marketing owns the customer relationship – a competitive advantage that can’t be copied – they take a full seat at the table.
So come by Monday, and learn how customer relationship data can increase your customer retention and profitability.
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Mark Helfen is a freelance writer, journalist, and marketing consultant.