Table Of Contentfmatter.qxd 07/11/06 03:11 PM Page iii
B Y
UILD OUR
C S
USTOMER TRATEGY
A G C
UIDE TO REATING
P C R
ROFITABLE USTOMER ELATIONSHIPS
J G. B
AMES ARNES
John Wiley & Sons, Inc.
fmatter.qxd 07/11/06 03:11 PM Page ii
fmatter.qxd 07/11/06 03:11 PM Page i
B Y
UILD OUR
C S
USTOMER TRATEGY
fmatter.qxd 07/11/06 03:11 PM Page ii
fmatter.qxd 07/11/06 03:11 PM Page iii
B Y
UILD OUR
C S
USTOMER TRATEGY
A G C
UIDE TO REATING
P C R
ROFITABLE USTOMER ELATIONSHIPS
J G. B
AMES ARNES
John Wiley & Sons, Inc.
fmatter.qxd 07/11/06 03:11 PM Page iv
This book is printed on acid-free paper. (cid:1)(cid:1)
Copyright © 2006 by Barnes Marketing Associates, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted
in any form or by any means, electronic, mechanical, photocopying, recording, scanning,
or otherwise, except as permitted under Section 107 or 108 of the 1976 United States
Copyright Act, without either the prior written permission of the Publisher, or authorization
through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc.,
222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web
at www.copyright.com. Requests to the Publisher for permission should be addressed to the
Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,
201-748-6011, fax 201-748-6008, or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their
best efforts in preparing this book, they make no representations or warranties with respect
to the accuracy or completeness of the contents of this book and specifically disclaim any
implied warranties of merchantability or fitness for a particular purpose. No warranty may
be created or extended by sales representatives or written sales materials. The advice and
strategies contained herein may not be suitable for your situation. You should consult with
a professional where appropriate. Neither the publisher nor author shall be liable for any
loss of profit or any other commercial damages, including but not limited to special,
incidental, consequential, or other damages.
For general information on our other products and services, or technical support, please
contact our Customer Care Department within the United States at 800-762-2974, outside
the United States at 317-572-3993 or fax 317-572-4002.
Wiley also publishes its books in a variety of electronic formats. Some content that appears
in print may not be available in electronic books.
For more information about Wiley products, visit our Web site at http://www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Barnes, James G.
Build your customer strategy: a guide to creating
profitable customer relationships / James G. Barnes.
p. cm.
Includes index.
ISBN-13: 978-0-471-77660-4 (cloth)
ISBN-10: 0-471-77660-2 (cloth)
1. Customer relations. I. Title.
HF5414.5.B36825 2006
658.8'12—dc22
2006008676
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
fmatter.qxd 07/11/06 03:11 PM Page v
A
CKNOWLEDGMENTS
In many ways, this project is based on lessons that I have learned over many
years of talking with the customers of hundreds of companies. I am a firm
believer that listening to customers must form the basis for company suc-
cess. If we fail to treat customers well and give them what they want, they
will leave—simple as that! I have tried in this book to gather my thoughtson
what works and what doesn’t, from the customer’s perspective. I am in-
debted to the many hundreds of customers with whom I have talked in person
and who have been surveyed on my behalf. Without their candid feedback,
I would have been unable to compile this guide to customer strategy.
Many people have contributed advice, ideas, and feedback along the
way, some of them consciously and others merely by allowing me to be in
their presence and to learn from them.
I am fortunate to be associated with the CRMguru.com organization,
and thank Bob Thompson for the opportunity he provides for me to com-
municate with the worldwide membership and with my colleagues on the
Guru Panel. I particularly have welcomed the insight of Paul Greenberg,
Naras Eechambadi, Graham Hill, David Rance, and Mei Lin Fung and the
editorial guidance of Gwynne Young.
I have also benefited from my association with the team at 180 Solu-
tions, Inc, where Brian Vallis and Grant Lee have provided me the oppor-
tunity to meet and interact with hundreds of small and medium businesses.
Through 180 Solutions and affiliated companies in Australia and the United
Kingdom, I have been fortunate to work closely with the most talented group
of individuals with whom I have ever been associated. I thank Anthony
Mitchell, Jackie Furey, Ross Smith, Colin Coverdale, Ian Waddelow, and
Robert O’Dowd for the opportunity to work with them and for sharing their
wisdom with me and the amazing Peter Silver for his technological wizardry.
Others have directly and indirectly contributed to allowing me to refine
and test my thinking and my customer strategy model. In particular, I thank
Leigh Puddester, Belinda Sadlowski, Mike Mielnichuk, John Gardner, Brian
Lewis, and Heather Tulk for providing me the opportunity to work with them
and their companies.
v
fmatter.qxd 07/11/06 03:11 PM Page vi
vi ACKNOWLEDGMENTS
I have benefited immensely from the insight of my friend and colleague,
Bruce Hunter, who has served as a willing sounding board for many of my
ideas and provided candid feedback. Martha Rogers offered advice along
the way that I greatly appreciate. I thank Gary Gorman of Memorial Univer-
sity for his ongoing support and Mykila Sherren for producing the graphics.
As always, my colleagues at Bristol Group continue to contribute to
my learning and to opportunities to work with wonderful individuals and
clients. My thanks go especially to Rick Emberley, Brian Cull, Gloria Rob-
bins, and David Ryan.
I am delighted to be working with the professional editorial team at
John Wiley & Sons, and particularly thank Sheck Cho, Helen Cho, Natasha
Wolfe, and Julie Burden.
Natalie Slawinski worked very closely with me in developing the frame-
work for the book, in clarifying and refining some of the more complex
concepts, and in challenging me where needed. Her contribution and com-
mitment were invaluable.
I dedicate this book to my family, and especially to Diane, who continues
to indulge my passion for customers and who regularly helps me see things
that I miss.
2006 JIM BARNES
fmatter.qxd 07/11/06 03:11 PM Page vii
C
ONTENTS
Introduction xiii
Chapter 1 How Do You Make Them Feel? 1
The Focus Is on the Customer—Just Listen! 2
Are You Customer Focused? 3
Wear That Customer Hat 4
ALong-Term Strategy 4
When Is a Relationship a Relationship? 5
The Hard and the Soft 7
Customers Are People, Not Data Points 8
We Need More Insight, Not More Data 10
Remember That Quarter-Inch Drill 11
The Little Things Aren’t—Little, That Is 12
Not Marketing as We’ve Known It 12
It’s Also a Different View of CRM 14
This Isn’t New, but It’s Not Easy Either 15
Chapter 2 Are They Loyal or Merely Satisfied? 17
Great Expectations 17
They Do Not Expect to Be Surprised 18
Satisfaction Is Functional, Loyalty Is Emotional 19
Satisfaction Is Personal and Situational 20
Fragility of Customer Satisfaction 21
Bridging Satisfaction and Loyalty 22
It’s Not a Relationship, but I Love Shopping There! 22
Loyalty Is Alive and Very Well 23
Repeat Buying Is Not Necessarily Loyalty 23
We’re in It for the Points 24
Understanding Loyalty 25
Loyalty: Functional or Emotional? 25
Why Satisfaction Is Like Cholesterol 26
vii
fmatter.qxd 07/11/06 03:11 PM Page viii
viii CONTENTS
Transforming the Functionally Loyal 27
Five Steps to Solid Customer Relationships 28
Where Do Expectations Fit? 33
What Does All This Mean for You? 35
Chapter 3 Create Meaningful Value 37
What’s Value Got to Do with It? 37
Value Creation: The Essential Role of the Firm 38
Value Equation 38
It’s Just Not Worth the . . . 39
What Will They Value? 40
What Is Value? 41
Customer’s View of Value 42
Value Hierarchy 43
Value Proposition: Functional and Emotional
Components 43
Giving and Taking Away 46
Creating More Valuable Value 51
Meaningful Value Creation: Being Lateral 51
Think Customer Context: What Are They
Going Through? 53
Value: The Essence of the Customer Strategy 56
Chapter 4 You Mean a Lot to Them 57
Becoming Customer Centric 57
Nature of Customer Relationships 58
They Know Them When They Feel Them 59
What Is a Relationship Anyway? 59
There’s No Emotion 60
Hierarchy of Emotions 61
Emotions in Relationship Building 64
Why Relationships Last 67
How Can You Mean Something Special to Them? 69
Building Blocks of Customer Strategy 71
Chapter 5 Beyond Mundane Experiences 77
ABroader View 78
Back to Relationship Building 80
