Podcast Episode #3: How to Retain Customers [The Middle]

Hi and welcome to the Key Customer Growth Podcast. My name is Jermaine Edwards and I have become obsessed with customer behavior and how people and organizations win with their best customers long term. After starting, failing, and growing my own companies, 30 customer growth projects, hundreds of strategies, and the study of 50 years of customer service research, I've seen firsthand how and why organizations win, lose, and win again with their most important customers. This podcast is my way of sharing those insights, failures, principles, and strategies so you can become what I call an Irreplaceable Advisor, someone so valuable your customers never want to leave. In an increasingly competitive world, how do you continue to deliver unrivaled value and deepen those most important customer relationships? Join me as your customer growth guide, your Your journey starts here. Hey, and welcome to The Key Customer Growth Podcast.

I'm Jermaine Edwards, your customer growth guide, and this is episode 3. And I'm opening up a whole new conversation. It relates back to the 5 big pitfalls that cause good companies to lose great customers. And you can see a link to that in the show notes at the end of this podcast. So in today's episode, I'm going to explore an area with you that in our analysis could be one of the most destructive forces to sabotaging relationships, value, and loyalty with our best customers. We call this phenomena being in the middle. So what is this being in the middle exactly? Well, being in the middle is when a person or organization who's doing well with its customers does not regularly evaluate its assumptions about its customer relationships, its perceived value of its customers and loyalty to them, their brand, and their organization. So what happens with these companies, these organizations, is when these assumptions are not looked at, they become vulnerable to competitive comparison. They become vulnerable to the perception of value going down with those specific customers. They also have more cost-based conversations, and inevitably it leads to lost business because they're unable to see, or more accurately see, the real truth that's taking place within their customer interactions. Now, being in the middle doesn't mean that a person or an organization is lazy. No, not at all. In fact, most organizations that I meet are endeavoring to really deliver best practices in their marketplace. They're sending out surveys, they're engaging customers, they can be doing everything right and still fall prey to this phenomenon of being in the middle. The more a company does not regularly evaluate its assumptions about its relationships, the more likely an organization will fall into the middle. And more dangerously, middle thinking. So what's middle thinking? Well, middle thinking here shows up in a variety of different ways, and it can be really subtle because in most cases, middle thinking causes good people and organizations to feel safe because they're following all the best practices for serving customers in their market. They can believe their results are due to a set of activities based on those best practices rather than other elements that serve and support those results. They can also be surprised and perplexed when a customer says they're going to a competitor, but yet their reviews and metrics tell a completely different story of the customer. And I've seen this hundreds of times. A particular statistic says that a customer is happy and doing well. All of a sudden, 6 months later, a customer goes to a competitor. What went wrong? Overall middle thinking is the reason we and our organizations often struggle to break free from the same circumstances each year with our best customers, always fighting for differentiation. So what I've noticed in my time working in businesses, working with businesses, and running my own is that we make a lot of assumptions about our customers and our relationships with them. And the challenge is being in the middle is hard to see because it's often taking place when things are going well. Being in the middle still pays the bills. It gets you a pat on the back and it keeps you in the job. So why worry about it at all? Well, today we still have choices with our customers. We can either choose to be picked first or we could settle for being in the middle. And I want you to be first. I want you to be the advisor your customer never wants to leave. So I'm going to share 7 principles that I think might be helpful, just thinking about some of these areas of why we might fall into the middle and hold on to some really key ideas that might form principles that will help us to have different conversations internally. So let's start with number 1. We should never assume the best practices we started a year ago with our customers still has the same perceived value today. So let's start with a question. Well, what if the best practices you started a year ago with your customers just aren't as valuable today? How would you know? What kinds of things do you have in place to really assess if that is the case? Let's take customer sentiment or things like NPS score, Net Promoter Scores, or customer satisfaction surveys. These can be great, but that often can be quite fickle in the sense that your customer needs are always shifting. You're having to send these things out on a regular basis to really get any kind of baseline for where a customer is. But despite, you know, it getting easier to discover what our customers are saying, social listening, different channels, data gathering, internal teams, partners, and so forth, what we're missing is it still doesn't really give us an indication to understand if our company is really stuck in the middle. Are we assuming that these specific areas or these best practices are actually delivering the results, or are there other things at play? Are we leveraging too much on one specific best practice and allowing that to inform our picture of the strategies and things that we deploy with the customer? Or are we actually looking at the variety of different inputs and we have a mechanism or framework for evaluating that so we're making better customer decisions? It's a question to you, but it's also an actual warning. Never assume the best practices you began a year ago are perceived the same way to your customer. Satisfaction scores that are going out, the way in which you walks through customer onboarding. Be very, very careful that we're not making too many assumptions in that area. Number 2, ensure the reputation you're after with your best customers actually describes the highest value they want to see. So let me give you an example here. I'll start with a question. What do you want your customers to say about you more than anything? Maybe it's you want to be known as being really high value, responsive, caring, whatever that word might be for you and your organization. We need to also ask, would that word, phrase, or otherwise best describe the way in which your customer sees the highest value to them and their organization? If you pursued that particular word with all your resource, might, and strength within your organization, would that specific word phrase that you have as holding as high value be as valuable today for the customer as it would 12 months from now? Meaning, is it actually the highest value they want from you directly? Because if it isn't, then we may have a problem. We want to be known— if you want to be known, I should say, as being high-speed and efficient, how valuable is that to your customer today? Or if you want to be high-value, how valuable is that to your customer today in terms of what kind of value they're actually experiencing? We need to really ask these questions because what we're pursuing in terms of really becoming the best in for our customers isn't actually the highest value that they see or want to experience, then we may have a problem with being able to sell new services and products and differentiating ourselves as your key players in that marketplace. That's number 2: make sure the reputation we're after with our best customers is actually connected to and describes the way in which they would like to see the highest value to their organization. Number 3, be aware of getting too many second-best answers from your customers. Now, what do I mean by this? Well, when we communicate with customers, often we fall into the trap of asking the same kinds of questions over and over again. And it happens because we become much more familiar with our customers. And we're not asking ourselves the questions, what don't we know about our customer today that would enable us to serve them better now or in the future? So we don't give ourselves enough space to really consider what the truth we actually need from our customers is, what we need to validate consistently, and what do we need to better understand as we move forward in our relationships. So often, because we're not asking these different questions, we are essentially getting the second best answer from our customers. And it's the second best answer that we need to be cautious of. And too many second-best answers may indicate your organization may be one of those companies moving into or are being stuck in the middle, because we're assuming certain things about our customers by the kinds of questions that we're asking without challenging our perspective. So that's really important. Beware of getting too many second-best answers. Begin to think about what is it we don't know, what do we need to validate, and how do we want to gather that information? Okay, that's number 3. Number 4, we must pursue relationships that are highly valued and sought after by both parties. Now, if there isn't value and commitment on both sides for you and your customer, neither will grow, and we can see this in any kind of relationship— friends, spouses. If one is pursuing and the other isn't, one person or one party is going to suffer. They're going to feel like they're putting in more effort than there is, and you can look at a lot of the studies around social relationship theory where there is a risk and reward analysis that we, we automatically play in our minds the moment we feel uncomfortable, the moment we feel vulnerable, the moment we feel like our efforts are not being matched by the other person. We can feel hard done by, we can feel like this isn't working, So you just want to check just for a moment, are you putting in lots of effort and you're not getting a lot of effort back? Or is your customer putting in a lot of effort, they're trying to communicate with you, and are they getting sufficiently what they want back? We need to really think about, are we pursuing relationships that are highly valued and sought after by both parties? If those things are not taking place, we have to be really careful and begin to assess 'What do we need to do differently here?' or 'How should we be engaging with our customers differently in order for them to experience it and for us to experience it together with our customers that we're pursuing this together?' That's number 4. Number 5 is confirmation bias unaddressed in your organization will become confirmation sabotage. So what do we mean? Well, let's describe confirmation bias to start with. So confirmation bias is a belief in which people tend to seek out and interpret information that confirms their own ideas. So in other words, people attempt to preserve their existing beliefs by paying attention to information that confirms those beliefs and discounting other information that might shift away from those ideas. So confirmation bias can be seen in all facets of life. Political policies, ways in which we engage with our family members, the things we want to see in our own relationships, and so forth. And it prevents us from accessing new advantage, new information. It prevents us from being able to pivot when needed and make better customer decisions. So we have to be really clear here. Just going back even to one of the other points earlier on, getting the second best answers from customers— confirmation bias will prevent us from asking better questions. So we just need to be aware in our minds, what specific things do we believe about our relationships today with our customers, that we believe about the results that we're producing, that we believe about what it— the actions that we're taking, that we need to really look at again, potentially? Are there any particular ways in which we can consider that? Maybe ask yourself, hey, what if we're wrong? Or how do we know this to be true? Ask yourself those questions to begin to challenge that perspective. Number 6, don't rely on Net Promoter Scores and satisfaction scores to define your customer view. Now, we touched briefly on this a bit earlier here around best practices, but the danger here in helpfulness of the NPS score— let's take that to start with— it gives you a tested approach to validating the potential likelihood of engagement with existing customers, and it can be really powerful. You're looking at projectors and passives and detractors and so forth, and we know how that actually works. But today there is still hot debate on the effectiveness of NPS scores and its overall use. So the question is, in the NPS score, why do people stay in the middle? And so there's always a follow-up question within the NPS of, you know, can you describe or add more to this? Why, why would you recommend this? Why would you not recommend us directly. However, in a B2B view, it still doesn't tell us if we as a company are stuck in the middle. We're being perceived as being less valuable, less differentiated to that particular customer, and it doesn't give us an indication to understanding if we're making particular assumptions about the relationship. So are we being compared Or are we seeing commitments? And how do we know? So the NPS score, CSAT, is not a great predictor of the future. So rather than just looking at, hey, would this person recommend us? Let's actually figure out if people are recommending us and how they're recommending us, who they're actually recommending us to and why. And we can often find out more from those questions than we can by just looking at these things alone. Now, You're probably doing a lot of this already, looking widely and not just focusing on NPS and CSAT as the core indicators. But I see this happen with some of the most, you know, professional companies on the planet, people who do customer experience well. They rely way too heavily in this area, and they missed other factors that influence the way in which people think and consume and engage relationally with businesses. So don't rely too much on the NPS customer satisfaction scores to define your customer view. That's number 6. Number 7, the single biggest action you can take to get out of the middle is to know what you want for your customers and what they want. And you can read more about this in my blog, LinkedIn, in the show notes. It will give you a much more detailed view of what this might be for you. But the key thing here is if you can understand what the natural next step for the customer is based on what their core vision is for themselves, who are they trying to become, and then what would need to be true, or what particular things would need to be supported in order to help them reach or move towards those different, different areas across their entire business, you'll have a much wider area of view to begin to see how you could add value in all the functional areas of your customer's business. And you'll become that kind of advisor your customer never wants to leave because you'll be able to demonstrate your relevance not just to a single department but to an entire company. And that's even more powerful. Than looking at a functional department. So that's the show, and hope you found at least one of these 7 principles of value. I'd encourage you to listen through it again, pick an idea, discuss it with your team, and see what new thoughts and perspectives or insights arise. And I'll see you next time on the Key Customer Growth Podcast.

Hey, thanks for listening to the Key Customer Growth Podcast. Hope you enjoyed the episode and got some great value. If that has been your story today, please share, comment, and subscribe so we can reach more people with the message and impact them also. Most importantly, I want to hear your feedback on what you liked or what you would like to hear and see in the future. Look forward to hearing from you, and you can find all the show notes below. Wishing you success in becoming an irreplaceable advisor.