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Robert Spector, author of Lessons From The Nordstrom Way, which is available in our , examines the business practices of a group of architects, a medical center, a bank and a hotel, all of whom have borrowed relationship-building principles from the great US retailer Nordstrom. In doing so, Spector shows that CRM is a way of doing business, not a software purchase.
After all is said and done, what you are doing in your business is selling a relationship. People like to do business with people they like. If your product or service is similar to your competitor?s and the price for that product or service is in the same ballpark, what?s going to get you the business and not your competitor? I submit it?s the relationship you have with your customer; the trust you have built up over time. Once you?ve established that relationship, why should your customer go anywhere else?
Until his retirement in 1999, Patrick Kennedy oversaw Nordstrom?s men?s shoes division, which is a quarter-billion-dollar business. Year in and year out, Kennedy?s division had the best financial performance?the best profit margins, the fewest returns; you name it?of any other division in the chain. Someone once asked Kennedy what he instructed the salespeople in his division to do to get those kinds of results. His answer: ?I tell them to measure both feet.?
Measure both feet? In the literal sense, a knowledgeable shoe salesperson will measure both feet because she knows that a customer?s right foot might be a slightly different size than the left foot. So, by measuring both feet, she is showing her customer that she knows about that potential size difference. But, even more important, while she?s measuring both feet, she?s taking the time to talk to the customer and to begin to plant the seeds of a relationship.
She?s taking advantage of the extra time to ask questions: What kind of business are you in? Are you on your feet all day? Do you need dress shoes or more casual shoes? Do you play sports? All the while, that salesperson is creating a relationship. What do you do in your business to create a relationship? When it comes to customers, new and old alike, how do you?metaphorically speaking?measure both feet?
Callison Architecture: Reinvent Yourself
Callison is not interested in doing a single project with a client and never hearing from them again. ?Because our goal is to perpetuate the firm?s life, many decisions are based on long-term rather than short-term benefit,? Robert Tindall, the president of Callison, told me. ?We?ve had jobs where we could have charged more, but we took the long-term view. I don?t want just one project with that one client; I want a dozen projects with that client.? Callison employees devote a lot of attention to building up that relationship.
?In our business, the best marketing situation is the call to start the job; not a competition, not a fee proposal,? said Tindall. ?We will do a lot of things to get the call to start the job and not have to jump through hoops. We hope that the call represents the quality of the relationship that has been built with that client and its long-term reward. If we have done a good job in building that relationship?and bringing the value as well?then our client will find a way to make it happen.?
Tony Callison, who founded the firm in 1973, and who set the tone for how all the people who have come after him think and operate, embodied that philosophy. The philosophy of Tony Callison, who passed away in 1988, was carried over and embodied by his successor, David Lindsey, who left the presidency of Callison in 1990 to become vice president and corporate director of store planning at Nordstrom, a position he has held since 1990.
Lindsey?s Ten Principles remain the essence of the Callison way:
1. Give the clients more than they expect. 2. Leave them something to remember you by. 3. Think the project (problem) through. 4. Ask yourself: If I were the client, would I pay for this? 5. Don?t give reasons why it can?t be done. Tell how it can be done and the consequences. 6. Don?t wait to do it if it can be done now. 7. Service the client not the project. 8. You don?t know if you don?t ask. 9. Start a conversation with one new person every day. 10. Sketch ideas being discussed in front of the client. Always bring tracing paper and scale.
Regarding Principle Number 10, Callison executive Stan Laegreid said, ?To this day, I never go to a meeting with a client without bringing along tracing paper, so that I can show the client an idea. It -doesn?t have to be some grand sketch suitable for framing; it just needs to outline your thinking on paper. A lot of times we forget how important that is.?
By sketching an idea in front of the client, the client sees how an architect is thinking, and it demystifies the experience. On the other hand, it subtly drives home the point to the client that the architect can do this job, and you, the client, can not.
Part of maintaining any kind of relationship is making sure it -doesn?t get too stale or too familiar, where you end up losing the chemistry that made the relationship work. To keep it fresh, you have to keep changing, ever so slightly.
?With companies that we?ve had long-term relationships with, we have to constantly reinvent ourselves so that we don?t become lazy and give them what we?ve always given them. It?s a constant challenge. It?s easier to grab a new client and wow them. The work begins after a few years when they are thinking, oh, we?ve been with these guys,? said M.J. Munsell, a principal in Callison.
?There are a lot of people knocking on our clients? doors. We have to remind ourselves every day that we are in constant competition with those other firms.?
To guard against this complacency, Callison has tried several approaches. ?One way might mean introducing new people in the firm to the client or providing the client with new services or a new product that they are not expecting from us,? Munsell suggested. ?It might mean changing the way we present to the client. That?s how we invigorate our staff. We tell them: ?Don?t just give us the same old thing. What can you do new for this client today that you didn?t do for them yesterday?? By tackling this problem, we can have creative fun and do new things in the process.?
Bob Tindall reminds his colleagues that ongoing service to a client is not a rubber stamp, but rather a source for new ideas and approaches. Callison devotes a lot of time and energy to researching the industries of their clients and tries to figure out where those industries are going.
?We want to go to our key clients and tell them two or three things that we think are going to be the next trend,? said Tindall. ?We want to be able to say confidently that in order for the client to go forward, from our point of view, this is the size of the site they need, and this should be the location.?
Just as Nordstrom salespeople maintain relationships with their customers by sending them thank-you notes after a sale, ?We clip out articles on subjects we think our client will be interested in, based on a conversation we had,? Stan Laegreid related. ?Or we will call a client and say we saw this particular project; we think you need to go see it. And the client we have relationships with will do the same for us.?
St. Charles Medical Center: Make Palpable the Difference between You and Your Competitors
All the customer surveys that St. Charles Medical Center takes consistently show that the general public?s primary image of hospital-based care is in the form of a registered nurse, because that?s the relationship people believe is most important during their hospital stay. Consequently, St. Charles devotes a lot of time talking with patients about how the Medical Center puts together teams and how those teams interact with patients throughout their stay?from the evening emergency room clerk who admits them, to the staff who cared for them during their stay, to the people who facilitated their discharge.
?Ultimately, it?s all about relationships,? said St. Charles CEO Jim Lussier. ?Everybody?s got the same basic clinical skills and technology. But it?s the relationship experience that?s going to determine what you think of this place. So, we try to differentiate ourselves and our services based on that relationship and what people actually experience. And we want that difference to be palpable. We want people to be able to walk in the front door and know that they are in a medical facility that?s completely different from any they?ve ever been in before. We?re just like Nordstrom in that patient-to-patient word-of-mouth is going to make or break our reputation.?
An overriding theme in St. Charles? employee orientation and training is the idea that the medical center is ?a cathedral of healing. We want that same cathedral power in the healing professions that churches have.? Said Lussier, ?That powerful feeling comes about from the relationships patients have with everyone who works for St. Charles. When you walk through the halls, you want people smiling at you. If you appear to be lost and need directions, we want somebody to stop and help you and take you where you need to go. Not only are all of those things a part of our training, they are also implicit in what we?re trying to do as an institution.?
Lussier readily admits that St. Charles has a long way to go, and that he and his staff are constantly trying to figure out easier and better ways to take care of the customer and reinforce the relationship. He pointed out that, ?Very often, this leads to some battles with physicians because the older physicians think that they?not the patient and the family?should be the center of our attention. There are times when we make something more convenient for the patient that might also make it a little less convenient for the physician, who sometimes takes objection to that.?
Lussier believes that customers as a whole are more aware of the small details and features of the institution, rather than the grand ones. ?We save lives and we do all those wonderful things, and patients will love us for it, but by and large those are not the primary experience of the majority of our patients,? said Lussier. ?The majority of our patients are people who come in here, need a good place to park, need happy people helping them out, and really feel like they?re the center of our attention while they are here.?
FirstMerit: Make a Difference in the Life of a Customer
?At FirstMerit, we start everything with this one basic question: Why do we exist?? said John Cochran, CEO of the 177-branch bank based in Akron, Ohio. ?We feel that our mission at FirstMerit is to improve and preserve the wealth of customers in every contact we have with our customers. We do that through relationship banking.?
Cochran conceded that virtually every bank talks about the concept of ?relationship banking? as if it were some exotic concept. Indeed, many of them employ people with the title ?relationship banker.? But FirstMerit?s strategy is that every member of its team is involved with the banking relationship with the customer.
?Our strategy for relationship banking is offering customers banking with a personal touch,? he explained. Assuming that a company offers its customers a competitive product, the quality that will separate one company from another is an understanding of the customers, ?through knowledgeable, caring bankers, who care enough to spend the necessary time to provide solutions that are particularly tailored to individual needs.?
Developing a meaningful banking relationship is no different than developing a meaningful emotional relationship because the same core values apply. The first core value is based on trust. ?Whatever we do with our customer must be done reliably and with integrity, for the benefit of the customer,? said Cochran.
?We believe that what we do must stand the test of time?that the customer can count on the fact that we?re not going to give him something that?s going to blow up on him. We?re not going to provide him inconsistent service?we?re not going to sell him something and not be able to serve.? The second core value at FirstMerit is that individual employees are empowered to make a difference in the customer?s life. ?Everyone of our people is trained to take control of any customer situation they face. There?s nothing that they can?t handle,? Cochran declared. ?We tell them that they can make a difference in the life of the customer they are servicing at this moment.?
Finally, FirstMerit is committed to providing service that?s significantly better than the competition. ?If we can?t provide undifferentiated, -high-quality service, we will not be able to exist,? said Cochran. ?Relationship banking is the ability to serve the customer in a differentiated way on a consistent basis.?
W Hotel: Read What Customers Want
A frequent guest arrived at the W New York Hotel to check in, and asked one of the Welcome Agents behind the registration desk if a particular Welcome Agent?the one who had checked him in on all his other visits to the hotel?was on duty. It was 2 o?clock in the afternoon, and the guest was told that that particular cast member didn?t start his shift until 3 o?clock. The guest said, ?Then I?ll wait in the lobby until 3.? The guest had established a relationship, which, for him, had become an essential, comforting ingredient in his W experience.
That Welcome Agent told Thomas Martin, W?s Casting Director, that whenever that particular guest checks into the hotel, they always have a warm friendly conversation. ?By creating that rapport, our cast member and our guest had established a connection and a trust level,? said Martin. ?When you?re a traveler on the road, that kind of relationship is priceless. You feel less like you?re away on the road and more like you?re coming home.?
The relationship begins when the guest comes through the door of a W Hotel. Doormen and bellmen (called Welcome Ambassadors in the parlance of the W) ?need to have enthusiasm for the brand and truly believe in the product,? Martin enthused. ?They need to talk from the heart?not from a script?about the features of the room as if it was their own home. Customers have to feel like this is their own personal home. That?s a clichîehat gets thrown around hotels, but I think our staff relates to people on a more personal level just by dropping the formality.?
Cast members are encouraged to be sensitive to the needs and moods of the guests and to do whatever it takes to satisfy them. ?We want them to go out of their way to read what customers want and to be able to make them comfortable,? said Martin. ?If we don?t have something in the hotel that a customer asks for, we encourage cast members to go out and get it. It could be something as simple as the time when a guest arrived late at night at W Seattle and discovered that he didn?t have solution for his contact lenses, which we don?t sell in the hotel. A cast member tracked down some solution at an all-night pharmacy in Seattle and brought it to the guest. The guest was floored.?
Tom Limberg, general manager of the W Seattle says that developing the relationship is rooted in execution, consistency, and fol-low-through. Limberg believes that, ?The key to everyone?s success is how we treat each other and how we treat our customers throughout the entire exercise. It?s how you open the hotel, it?s how you run the hotel; how you open your business and how you close your business. It has to be consistent day in and day out, year in and year out. In our business, we never close. It?s 24 hours a day, 365 days a year. We have to be around to know what?s going on firsthand. We need to be around to show that third shift that what they do is important to us.
?In some businesses, sometimes you can?t get a phone answered in the administrative office after 5 o?clock. Maybe you can?t find a manager on a weekend. You must make it a priority that the vehicle for service or resolving an issue at a higher level is there. That?s how you build and maintain a relationship.?
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