John O’Connor interviewed on “Down To Business” with Bobby Kerr

Last Saturday, our CEO John O’Connor was interviewed on Newstalk’s Down To Business weekend radio programme about his new book Customer At The Heart. If you missed the show, here’s that conversation between Bobby and John again.

Quite a few topics were covered in the short interview with Bobby Kerr. The one that I enjoyed most was the concept of “sacking the customer” – being honest about when you can’t service particular clients and choosing instead to concentrate on customers where you know you can excel.

Feel free to get in touch with us if you want to hear more about Deep-Insight’s work in helping CEOs create customer-centric organisations. And if you want to find out more about dealing with clients that are Opponents and Stalkers, just click here for another blog on the topic.

Craig Johnson
Customer Relationship Advisor, Deep-Insight

Purchase on Amazon

Customer At The Heart

Bobby Kerr: A lot of words have been said and written about putting the customer first but many businesses and business leaders struggle to move away from product and technology-based models to ones that are truly customer-centric. So how hard can it actually be? John O’Connor is the CEO of Cork-based company Deep-Insight and he is the co-author of Customer At The Heart: how B2B leaders build successful customer-centric organisations. John, you’re very welcome to the programme. Tell me a little about your background and what inspired you to write this customer-centric book.

John O’Connor: First of all, you need to be a big mad to write a business book. I was saying earlier that we’re not going to knock Margaret Atwood off the top of the Amazon charts even though the book is available on Amazon. So why did we write the book? One question has been rattling around in my mind for the last 15 years that I’ve been running Deep-Insight. At Deep-Insight, we gather feedback for Business-to-Business (B2B) customers with the objective of getting our clients to use that feedback to build deeper client relationships. Sometimes we tell our clients “You’ve got a fantastic set of customers who love you to death.” Other times it’s a case of: “They hate your service and want to move away from you”. In that second case, it seems phenomenally difficult for our clients to move the dial and really improve their customer scores. Or if they can improve, it takes them a long, long time. So the question we had in our minds was: “Why does it take so long, and what is it that you have to do to transform an organisation to be truly customer-centric?”

Bobby: I once worked with a guy who used to tell me that a customer was somebody that allows you to make a profit. That was his definition of a customer. If you have a customer that doesn’t allow you to make a profit – because they are high-maintenance, they take up time, you have to manage them and you find that you can’t make a profit – how do you deal with that situation?

How to ‘Sack A Customer’

John: So here’s a little trick. You’ll find that in any portfolio of customers, probably a third are ‘Ambassadors’ for you and another 40 or 50 percent are good ‘Rational’ customers. Then a small percentage are what we call ‘Ambivalents’, ‘Stalkers’ or ‘Opponents’. What you should do is take your Opponents by the hand and walk them down to your competitor’s office and say “There you go…”

Bobby: “…here’s the guy you’ve been looking for…”

John: Yes. Basically you should not be afraid of sacking customers that you can’t service properly.

Bobby: So it’s almost like putting your hands up and saying “You know what, you’d be better off going elsewhere” and hoping that they will go elsewhere and cost your competitor money?

John: It is. But if you have those hard conversations… honest conversations… with the customer, either you will turn that relationship around or they’ll move off and allow you to spend time with the clients that you can really do some good for.

Getting your clients to design your products

Bobby: It’s interesting what you say, John. You know, we look at customers almost on a product basis. In other words: I make this product, I sell it to the customer, I’m finished with him now I want to find the next customer. Once the sale is made, that’s the end of the journey. But it’s only really the beginning. Is that right?

John: Yes, but but it’s also the wrong starting point for the journey. If you have a product-centric mindset, you are basically building something that you hope somebody is going to buy. A much better way is working with your customers to try to craft the next generation of products or the next set of widgets that you’re going to manufacture. Because once they are manufactured, the client has already bought them. After all, they’ve actually help you to design them in the first place. And very few companies have figured out how to do that properly.

Customer-Centred Leaders

Bobby: And when you talk about leadership, what are the customer-centred leadership traits that you would see in an organisation.

John: First of all I would say but if you haven’t got good leadership in an organisation, you’re never going to transform the company to being customer centric. The companies that have done very well are ones where you have a really, really passionate leader who does put the customer at the heart of everything. The second thing is that they intuitively understand that by doing the right thing for the customer, the profits will follow. The third thing is they are also very good at executing a plan or a strategy to put the customer at the heart of everything. Now they can be ‘Big Picture’ people but they know how to put together a team that will get things done, and will be relentless about making sure that it happens.

Bobby: When you look at the challenges of big organisations like utility companies, banks… you know: those organisations that everybody loves to hate where they provide a service based automated telephone answering machines… How can those organisations become customer-centric in a real way?

John: Well the focus of our book was business-to-business organisations. We were very lucky and got to talk to people like Gavin Patterson, the CEO of BT but it was very much on the B2B side of things. We talked to David Thodey in Australia who was CEO of Telstra, their biggest telecommunications company. We talked to people in eBay, HP and Atos but the focus was really more on B2B. Regardless of the industry, you can be either very customer-centric or not at all. And if you’re not at all customer-centric, that’s a pretty difficult place to be.

Culture change

Bobby: When you talk about culture in a company, the culture can sometimes turn sour. How can you use the customer to enact change in the company’s culture?

John: Well, one of the other traits of being a good customer-centric leader is that you never let a good crisis go to waste. A lot of good leaders will use the customer as a platform to try to change the culture of the organisation. They’re constantly talk about the last customer visit that they had, the last product that they developed in conjunction with that customer. By continually doing that and by getting the customer into every discussion, people in organisations will start to follow the direction of their leaders.

Bobby: And finally, John, is it true that if you can get the customer to be your ambassador – in other words, the customer is talking about your business being the best business known to man – that’s the most powerful advocate that you can have? It trumps any advertising or any marketing that any company could do?

John: Absolutely. We called those ‘Ambassadors’ and as I said, about a third of your customers should be ‘Ambassadors.’ Even if another 40% are ‘Rationals’ who don’t believe you are truly “unique” but they are good customers all the same, those Ambassadors and Rationals are the clients that will deliver your sales for the rest of this year and into the following years.

Bobby: Well it’s a fascinating subject. John O’Connor is the CEO of Cork-based company Deep-Insight and the co-author of that new book on customer centric organisations. Thanks very much for joining us, John.

Help! What Do I do with my Stalkers and Opponents?

If you’re a typical B2B company, the chances are that you have good or excellent relationships with the majority of your clients. But you will also have clients where your relationship is not as strong. At Deep-Insight we help you understand these client relationships by segmenting them based on the strength of their relationship with you.

Here are the five categories we use:
 

Customer Relationship Quality – the Strongest Relationships

 
Ambassadors

The most loyal client category is the Ambassador segment. Ambassadors are your most valuable customers. They have a unique relationship with you and will recommend you to others. They are also prepared to pay a premium for your products or services – price is not an important consideration for them because of the quality of the relationship. Typically, a third of your clients are Ambassadors.
 
High Rationals

The next segment of clients are known as Rationals. They rate you positively but do not see anything unique in the relationship. Rationals will take their time to assess alternative sources of supply and the relationship can become unstable if good alternative offers exist. Typically, half of your key B2B accounts fit into this category. Generally they are good clients albeit not as loyal as Ambassadors.
 

The Weakest Relationships

But wait! That doesn’t add up to 100%. What’s the story with the others?

Well, the answer is that in all B2B account portfolios, there are clients that don’t love you that much. We typically find that 10-20% of accounts have poorer relationships with you and fit into one of the following three categories:

Ambivalents

Ambivalents often have a “love/hate” relationship with you. In some instances, they love the way you solve their problems but hate the way you treat them. More often, you are killing them with kindness but failing to solve their business issues. You may think the relationship is strong but you don’t really understand their issues and can’t propose business solutions to move their business forward.

Stalkers

Stalkers are often only interested in price. Sometimes they can be large corporate accounts looking for special offers and discounts. Other times, they are smaller accounts that view your services as poor value for money. Stalkers see nothing unique in the relationship and often have very high service requirements. They play different competitors against each other and do not generate a positive value for your portfolio.

Opponents have the poorest relationships with you. They are deeply dissatisfied and often highly frustrated by what they see as consistently poor service. Opponents have a negative relationship with the company and generate negative value. They can sometimes be won back if the reason for their dissatisfaction is identified and addressed but, in many cases, the relationship has broken down irretrievably and they can not be won back.
 

Managing Ambassadors

Before we look at how to manage Stalkers and Opponents – the main point of this blog – one quick point about how to manage Ambassadors. Ambassadors are willing to recommend you. So ask them for testimonials. Trustmary is a Finnish company that helps clients do exactly that using Net Promoter Score as the key metric for identifying Ambassadors.

Don’t be afraid to ask Ambassadors for testimonials or for introductions into other businesses. They want to help you. So just do it.
 

Managing Stalkers and Opponents

So what to do with these poorer-value relationships, particularly Stalkers and Opponents?

Three things:

1. Decide if you want to keep them or fire them

It may sound strange to talk about ‘firing’ clients but sometimes there are clients that can not be serviced effectively or profitably. Sometimes their expectations are too high, or the fit between their needs and your products or services is limited. In such cases, it’s valid to ask the question “Would we both be better off if we ended the relationship?” The big advantage about firing customers is that it frees up sales and account management time. This time can be used for more profitable activities such as cross-selling and upselling to Ambassadors, or for converting Rationals into Ambassadors.

2. If the answer is FIRE THEM, find a ‘beautiful exit’

Stalkers and Opponents have a corrosive influence on your company. They sap energy and consume resources that can be better used elsewhere. They also have a corrosive influence on other clients as they spread a negative message about your capabilities and services. Have that tough conversation with the client before the situation deteriorates, and help them move to a competitor. Do it cleanly and professionally. Find what Finnish Business Professor Kimmo Alajoutsijarvi refers to as a Beautiful Exit to the relationship – a disengagement that “minimises damage to the disengager, the other party, and the connected business network.”

3. If the answer is KEEP THEM, put a proper recovery plan in place

Many of Deep-Insight’s clients will put a Service Improvement Plan (SIP) in place for poor-scoring accounts, typically Opponents or Stalkers. These SIPs involve a significant increase in service support to that client. They also require an open and honest conversation between the Account Director and the most senior people in the client organisation. In large complex B2B client relationships, changes in behaviour are typically required on both sides to bring the relationship back on an even keel again. Don’t be afraid of saying to your client: “We’re committed to making improvements on our side, but we need you to do X and Y for this relationship to work.” (more…)