In your opinion, what big business imperative does not get enough attention?
—Pedro Cezar Dantas Neto, Sao Paulo, Brazil
Not innovation, that is for sure. Appropriately, it is on everyone’s mind these days. It’s the same for technology, globalization and employee engagement—all burning bushes, as they should be. Quality does not get talked about as much as it used to but that is probably because it is such a given.
Malay Karmakar /Mint
The same for teamwork. And strategy? Well, in today’s lightning-paced world, people seem to be giving it about as much attention as it deserves. Which, to your question, is something you cannot say about stickiness. Of all the business ideas in the “debate-o-sphere”—and stickiness has been out there for years now, known by many names, including “customer retention” and “loyalty”—it still does not obsess managers nearly as much as it should. Because stickiness can change the game: It transforms business from a transaction-based model to a more lasting, mutually beneficial one in which companies improve their own revenues and margins by improving their customers’ competitiveness.
Indeed, the only trouble with stickiness, as far as we can see, is that it can be so hard to create. But still, allow us to suggest a few proven ways to go at it. The first, perhaps not surprisingly, is good old-fashioned service. What is surprising, however, is just how exceptional, consistent and relentlessly inventive customer service needs to be to stand out these days. Take Mitchell’s, the Connecticut-based clothing chain. It has managed to outperform its competition in the tough suburban New York market by treating its customers not only like royalty but also as unique individuals, offering personal productivity “enhancements” with conveniences such as same-day tailoring and home delivery.
On a much larger scale, The Four Seasons also wins hearts and wallets in the crowded luxury hotel market by invariably delivering high quality, seamless experiences. For manufacturing companies, customer service is critical but another approach to stickiness can pack an even bigger wallop. It requires moving from a product-focused business to a product- and long-term service business by guaranteeing productivity gains to customers.
Now remember, most engineers want to build new machines; the faster and more powerful, the better. With this model, you are asking your engineers to focus on continuous technology upgrades to meet the commitments that got you the sale and you are betting they are talented enough to design and deliver those upgrades in a way that can guarantee productivity increases over many years. That is a big wager, but if you are right, it is a huge win for everyone at the table.
Another option open to manufacturing companies, particularly in commodity businesses, is to use your strong balance sheet to take a major outlay of capital off a customer’s balance sheet. Speciality industrial gas companies win long-term contracts, for instance, by building their plants next to customers’ factories, providing over-the-fence, competitively priced raw materials without the hassle of hazardous delivery. Similarly, some plastic manufacturers build on-site silos for their customers, essentially guaranteeing an ever-present, cost-competitive supply. Again, their customers return the favour by, well, sticking around. Putting manufacturing aside for a moment, almost all companies can create stickiness by sharing know-how. You can welcome customers into your R&D facilities with a “my lab is your lab” mindset, share new designs for packaging or demonstrate exciting products coming down the road.
If your expertise happens to be in human resources, you can train your customers’ managers in hiring, coaching, evaluation and the like. Many companies that are advanced with lean Six Sigma, for instance, send their “Black Belts” into customer organizations to launch training programmes. Such unbridled sharing of expertise can create a real affinity, not to mention a mutual obligation that typically yields dividends for years.
Finally, many businesses can create stickiness by building user communities. Every year, in cities around the world for instance, the software company SAP hosts conferences where customers can meet with IT experts, software developers and—most importantly—each other to share SAP best practices. The conferences are not sales events per se but you can be sure that the attendees leave with a feeling of partnership with SAP that has to be a big part of the company’s steady share gains.
We are not inventing gravity here: We know that in most companies all or some of these approaches to stickiness have gotten lip service. But too often that is all they get. The truth is that any one of these approaches involves a major culture and mindset change with a management commitment of time and money and the acceptance of some level of risk.
Basically, the organization must come to see the world through the customers’ eyes. Otherwise, unlike gravity, stickiness just won’t happen.
©2008/BY NYT SYNDICATE
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