Harvard Business School2014-07-16 11:20 AM

Unlock the Mysteries of Your Customer Relationships

Author

Jill Avery, Susan Fournier and John Wittenbraker

Abstract
Consumers have always had relationships with brands, but sophisticated tools for analyzing customer data are finally allowing marketing organizations to personalize and manage those relationships. With this new power comes a new challenge: people now expect companies to understand what type of relationships they want and to respond appropriately—they want firms to hold up their end of the bargain. Unfortunately, many brands don't meet those expectations.

Full Article
Consumers have always had relationships with brands, but sophisticated tools for analyzing customer data are finally allowing marketing organizations to personalize and manage those relationships. With this new power comes a new challenge: People now expect companies to understand what type of relationships they want and to respond appropriately—they want firms to hold up their end of the bargain. Unfortunately, many brands don’t meet those expectations.

Despite the “R” in CRM and the $11 billion spent on CRM software annually, many companies don’t understand customer relationships at all. They lack relational intelligence—that is, they aren’t aware of the variety of relationships customers can have with a firm and don’t know how to reinforce or change those connections. They may be very good at capturing simple demographic data—gender, age, income, and education—and matching them with purchasing information to segment customers into profitability tiers. But this is an industrial view of customer relationships, a sign that many firms still think of customers as resources to be harvested for the next up-sell or cross-sell opportunity rather than as individuals looking for certain kinds of interactions.

As a consequence, consumer companies often manage relationships haphazardly and unprofitably, committing blunders that undermine their connections with customers. A person wanting to be treated like a friend is more likely to be treated as a mere party to an exchange—or, even worse, as an adversary. It goes the other way, too: A customer looking for a mere exchange may get an off-putting attempt at building a friendship. In study after study, we find that consumers are frequently frustrated by companies’ inability to meet their relationship expectations.

Through our two decades of research on brand relationships in a wide variety of industries across the globe, we’ve learned how companies can glean information about the kinds of connections their customers are looking for. We’ve also identified a number of relationship types, complete with the rules each type implies. Some of the types are what you’d expect; others veer into surprising territory. Do your customers want to have a fling with the brand? Do they assume a master–slave relationship, with the customer playing master to a servile company? We’ll explain these and show why they matter for profitability.

Drawing on our analysis of firms that have made progress in managing relationships, we’ll show how companies can unlock the mysteries contained in their portfolios of relationships and deliver on customers’ expectations.

A New Approach to Relating
Why are relationships important? Consider these examples from our research.

A customer of a grocery delivery start-up is very happy to have found a service that can save him from one of his least favorite chores: going to the supermarket. He wants this business to survive, so he sends in suggestions for fixing operational glitches. But he gets no response—just a stream of promotional e-mails encouraging him to place orders more frequently. Dismayed, the customer cuts back his use of the service, believing that the company isn’t interested in developing a relationship on his terms.

A clothing brand popular with plus-size baby boomer women tries to reposition itself as relevant to younger, thinner customers and in so doing alienates established customers, who feel betrayed and disrespected—as though they’ve been dumped for someone more attractive...


Published on Harvard Business Review in July-August, 2014.
http://hbr.org/2014/07/unlock-the-mysteries-of-your-customer-relationships/ar/1 

KEYWORDS

SHARE & LIKE

COMMENTS

ABOUT THE AUTHOR

Harvard Business School

哈佛商学院是世界最著名的商学院之一,是常春藤联盟商学院之一,早先名为”哈佛大学工商管理研究所“。美国教育界有这么一个说法:哈佛大学可算是全美所有大学中的一项王冠,而王冠上那夺人眼目的宝珠,就是哈佛商学院。哈佛商学院的名望,不仅是由于她首创了MBA学位,也不仅是因为她在管理教学中首创了案例教学法,还不仅是基于她拥有一个庞大的明星教授群,而是因为她确确实实向社会输送了大批极其优秀的人才。正是这些毕业生在社会上的卓越表现,才使哈佛商学院扬名世界。

0 Following 6 Fans 0 Projects 17 Articles

SIMILAR ARTICLES

AuthorNava Ashraf, Erica Field and Jean LeeAbstractWe posit that household decision-making over fertility is characterized by moral hazard due to the f

Read More

AuthorLynn S. PaineAbstractOne surprising role of Nike’s corporate responsibility committee is to provide support for innovation. More and more compani

Read More

AuthorEugene F. Soltes, David H. Solomon and Denis SosyuraAbstractWe show that media coverage of mutual fund holdings affects how investors allocate mo

Read More

AuthorSilvia Bellezza and Anat KeinanAbstractThe article discusses how exclusive brands can increase their sales by moving "downmarket" without diminis

Read More

AuthorMax BazermanAbstractWe'd like to think that no smart, upstanding manager would ever overlook or turn a blind eye to threats or wrongdoing that ul

Read More

AuthorRobert C. MertonAbstractCorporate America began to really take notice of the looming retirement crisis in the wake of the dot-com crash, when com

Read More

AuthorRanjay Gulati, Charles Casto and Charlotte KrontirisAbstractIn March 2011, Japan’s Fukushima Daiichi nuclear power plant was devastated by three

Read More

AuthorAnita ElberseAbstractMarkets for soccer players are winner-take-all markets in which a select few top players earn extremely high rewards. The se

Read More

AuthorJill Avery, Susan Fournier and John WittenbrakerAbstractConsumers have always had relationships with brands, but sophisticated tools for analyzin

Read More

AbstractWe conduct and analyze two large surveys of hypothetical annuitization choices. We find that allowing individuals to annuitize a fraction of th

Read More