Podcast Episode #4: How to Prepare to Protect Your Best Customer Relationships in Difficult Times

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 journey starts here. Hey and welcome to the Key Customer Growth Podcast. I'm Jermaine Edwards, your customer growth guide, and this is episode 4.

Now in this episode, we're going to explore the unavoidable reality of difficult times with our customers and importantly how to really be prepared to effectively manage those moments so you can have repeatable success in any season. And yes, there are seasons. We go through very different seasons with our customers. And what we can sometimes miss is that those seasons require sometimes very intentional approaches and proactivity. Seasons of growth, seasons of unwanted stagnancy. Seasons of reconnection, seasons of tension. And one of the biggest seasons to consider, in my experience, has been the season of disruption, which can threaten the progress and continuation of any relationship or opportunity. And disruptions can take many different forms. Often it comes with force in times when fear is high. Like market downturns, a customer who loses key people in its business, uh, an organization that's experiencing really strong legalization or regulatory pressures, or there's maybe kind of austere times taking place and political uncertainty. Whatever those things might be, it's disrupting specific ways in which a customer might seek to operate its business, and it might affect the way in which they view the relationships they have with the people and organizations they're working with. So if we're not careful, our customers, if they have not fully emotionally, intellectually, and practically understood the value of our products and services, It is very likely in times of disruption where fear gets high, they'll see us as just another project, or worse yet, just another cost to their business. The good news is we can do something about this. The not so good news is that we'll have little to no control over what happens to our customer depending on the kind of disruption that it is. But we can do some— something about it. We can actually be empowered and equipped to make some good choices and mitigate the risks to us, and hopefully in doing that, create new opportunity to serve our customers better, to really deepen the ties and relationships that we have, and help our customer through those times as well. So how do we ensure all the investment of time, energy, money, and resources into our most important customers don't just vanish overnight because of the lack of preparation or the ill-preparedness that we can have as people and organizations in times particularly of disruption. The first thing is understanding the risks and really getting this into your business, the mind of your daily practice. There are some real risks that need to be held for those who are ill-prepared to really effectively respond to disruption. Number 1 risk: you'll lose customers. Number 2: you'll become frustrated and disconnected because you'll constantly be experiencing the same kinds of problems year on year if not addressed now. Number 3: you'll lose time and money, significant amounts. I've seen in many cases. Number 4, you'll have increases to your costs and potentially lose competitive advantage. Number 5, you'll leave yourself extremely vulnerable to your business being more disrupted than it should be, and that could mean— and I've seen this happen in some cases— a company completely losing its share of value in a particular marketplace and sometimes even going as far as to go into administration. I don't want that for you, and neither should you take these things lightly within these particular times. No one can escape areas and seasons of disruption. They will happen. The only thing about it is when and not if. So what are the 3 things that that are most important for us to evaluate. And I say 3 things because I need to— what I believe the most important things are really to consider when thinking about how to manage yourself and your customers in very difficult or disruptive times. So there are 3 key evaluations to understand exactly how ready we are to meet big disruptions in whatever business or industry you're in. So the first is the evaluation of the effectiveness of your measures for identifying risk to customer churn and defection. So again, measuring and identifying risk. If you have to evaluate that in your business on a regular basis, how effective are we at being able to identify risk early in the relationships with our customers? So risk doesn't happen in a bubble. The more you study risk as not just an exercise for negative thinking but as a business-driving activity, the more value and opportunity it will bring. So let me give you a way in which you might think about this. So there are essentially 3 intersecting areas worth considering when, when looking at where you might place your conversations around risk. So you might look at the risk to your contacts, your main stakeholders, risk to their overall company, and risks in their marketplace, so who they relate to and with. So let's just imagine for a moment that the disruption is a new market legislation that might increase the cost of services that they deliver, or your customer delivers, to their own marketplace. So the risk to your contact could be now they will have to be forced to review their internal strategies. Risk to the company might be lower revenue and potential increase in costs if not managed well. Then risks in their market might be they'll become less competitive, potentially vulnerable to new competitive entrants who can perhaps meet those cost expectations and offer different kinds of value and services to their own existing customers. So that's what the potential disruption could cause to those three different areas. What are the potential responses to that? Well, your contact could respond by stopping existing projects and having more cost-focused conversations with you, which will change the dynamic of the relationship. The company itself could respond in a way in which it asks the entire business to reduce its cost and begins to look at new ways to optimize different areas in its business. And from a market perspective, they may start looking for new partnership and suppliers that might give it some new advantage in being able to mitigate the potential legislation risk of the costs they might incur. It's this really simply, really simple exercise to begin that journey. If you can begin to identify those specific risk areas And there are a number of different kind of analytical tools you can use, risk analysis frameworks. You might want to draw in people from risk in your own business if you have them to really think about this. But to begin with, just look at it through those intersecting areas. What is the actual risk? What are potential risks? Risks to your contact, risks to their company, risks in their marketplace. And look at what the potential responses might be, and you'll begin to be moving in a really helpful view of being able to see what the reality could be and then create plans to respond to that. There's more detail on that in the blog that I've written around this, so you can really begin to exercise that within your teams. So that's number 1: evaluate the effectiveness of how you can measure and identify risk in your business to customer churn or defection. Number 2, we need to evaluate our ability to quickly and effectively mobilize and engage the right people or internal teams in our business and our customers' business as well, where that might be necessary. There are 4 things for us to consider when we look to really engage or quickly mobilize our team to see how effective we are. So the first is we need to discern. We need to be aware of who actually needs to be on the team based on the risks that have been identified. And it's always going to be a collective of different minds who touch the customer in different areas in the relationship. So we need to be aware of who we actually need on the team, when we might need them, and why. Because that when and why will move us into the next point. After discerning, we need to now identify Choose who's right and clearly define their roles. So once we're aware of who do we actually need on the team, when do we actually need them, why do we actually need them, we now need to identify those individuals and say, okay, this is who we need, clearly define their roles. So when we have that kind of clarity, we can step in confidently knowing exactly what we'll contribute to or how other people will contribute to the overall outcome. Then we want to coordinate. We want to harmonize the team and set expectations, especially around how you'll actually work together effectively. You want to coordinate. Then we want to engage. You want to hold people accountable and model the best practice for communication that you all want from a place of results, from a place of customer-focused activity, holding yourself accountable modeling the practice for communication and doing that regularly. If you can assess those specific areas in your business, how well you are at really identifying or discerning the right kind of team, identifying how good you are coordinating, how good you are engaging, holding people accountable, you'll be able to assess and quickly assess very quickly how likely you are to be able to respond to potential disruption within your client's business or in their marketplace. So that's number 2, evaluate how good you are or how quickly you can effectively mobilize and engage the right people and teams both internally and for your customers' business. Number 3, we need to evaluate how able we are to find root cause problems and execute plans. It's one thing to actually bring a team together once you've identified the risks, but hey, now we need to figure out, are Are we actually solving the right problems? And, and actually, how equipped are we to execute these specific plans? So to do this, the first thing we need to know or focus on is not really on the executing first. It is the root cause analysis. And most people do not consider root cause analysis as part of execution, but it is essential. You cannot possibly create powerful plans that deliver consistent results without understanding the real problem you are trying to solve. It is critical. So here is a simple, you know, 7-step process, and you can find more of this information in the blog that I've written. I'll attach that to the show notes on thinking through these root cause and execution phases. So in Phase 1, root cause analysis. Now there are a number of different ways to do root cause analysis using the 5 Whys framework, fishbone Pareto chart, scatterplot diagram, failure mode and effects analysis. There are so many different ways to approach this. What I'm giving you is perhaps the simplest deconstruction that you can begin with before going any deeper, depending on the kinds of, of, uh, problems that you're looking to really dive into. So the first bit of this kind of 7 different areas here is kind of what I call Phase 1. So Phase 1 is root cause, and there are 4 parts to this Phase 1. So the first of all is defining the problem. What is it really? Do we have all the data needed to truly understand it, to understand what's taking place? What else do we need? Then we go to explore. We seek all the possible causes. Why might have this happened, this particular problem? How did we get here? How did this happen for the customer? How did this disruption take place? What did we miss? What are the specific parts of this that need to be considered? Then solution: what are the options to responding to that potential problem based on the disruption, based on what we now understand about it? And then implications: what are all the upsides and downsides of this particular problem or disruption to us as a business and to our customers? We're now looking at that in a whole sphere of kind of root causes, all those particular risks that might come with that. Then we move into Phase 2, Execution, which essentially points 5, 6, and 7, which is decision-making. What is the best choice or course of action here that we can take based on what we now understand and know from our evaluation of root cause and looking at the implications, upsides, and downsides? What is the best choice here? And once you've made that decision, we go to action. We put it into practice. To own, track, and measure it. And once we've started putting it into practice, we want to evaluate it and evaluate this regularly until completion. Then we review whether it actually worked. Did it actually make a difference? Did we move the needle? Did we actually get visible and evident results from the practice, from the way in which we have reviewed the actual key problem, and executed on it? Can we see that? In other words, we get focused, we get accountable, we get connected, and we make those things happen, but we must stay true to reality. We must stay true to the results are the truth of the effort. Results are truth of the effort, and we must have a look at that and evaluate whether or not it actually worked. And this will help us to understand if the root cause analysis was actually accurate, or if the way in which we were executing was actually accurate or supportive, or the resources were actually needed, were actually accessed appropriately and helpfully and on time, or whether or not we actually chose the right kind of action. It would give us all that information. So what can we learn from all these different areas? Well, we know that there are some real risks for us not acting and not being prepared and thinking about the times when we, we face these seasons of disruption and real challenge with our customers. There are some real risks that we want to avoid of losing customers and becoming frustrated and losing time and money and, you know, increasing costs and leaving ourselves vulnerable to competitive influence. And then there are 3 ways, or 3 particular ways, in which we should be thinking about preparation. We need to evaluate on a consistent basis how effective our measures are for identifying risk. We need to evaluate how easily and effectively we can mobilize teams and engage the right people internally and externally. And we need to evaluate just how good we are executing and really getting to a place where we're delivering great evaluation of root causes, and executing those plans, moving to action. So those things are so important and must be considered. If you don't have those plans in place or robust framework for do that, then I strongly recommend just starting with the blog, looking at those areas, and going back to the business and really asking the hard questions on, hey, how confident are we that if a real disruption took place, we could really execute this well? We'd know exactly what to do and everybody would know what role they would need to play? If that's not an answer you can give right now, then you may be putting yourself in real danger. So here are the 5 big ideas just to close this off. So number 1, you know, planning for the worst case makes implementing in the best case fun and easy. It really does. So planning for worst case makes any other kind of case, you know, and implementing in those areas fun and easy. Number 2, planning is a team sport, and you can generate better customer insights together with others doing that in a very structured and a very process-driven way that allows everybody to see the journey in which you're taking and repeat those things consistently. Number 3, we need to identify risk in those 3 areas. Remember the contacts, you know, their business, their marketplace. Look at those intersecting views and begin to look at risk from their perspective, your customer's perspective. Number 4, bring a team together to verify those risks and get your joint ownership and involvement over evaluating those areas so you can really begin to see through the lens of the customer and get multiple different inputs that allow you to get a much clearer view of where things could go or might go within those disruptions or risks. Number 5 is execute to root causes and not to perceived responses. Not to those symptoms, not to those things that we, you know, immediately receive or feels uncomfortable in the moment. Those behaviors we still have to address when we see our customers change or something, you know, really gets moved in a direction which we do not like, but we have to execute to root causes and not to perceived responses that we see, not to those symptoms. We're just setting ourselves up for a game that will end up being a losing game, even though we put points on the board. It will just not turn out well. We have to execute to root causes and not to perceived responses. So I really hope that's been helpful. Like I said, there's some extra notes obviously in the blog, in the show notes that you can access. Read that blog, get some more detail just around those 3 evaluating areas, and I'm confident it will really help you have some more meaningful conversations internally. So I'll see you in episode 5. We're going to be discussing to really, really juicy stuff as we move forward in this podcast, and wishing you all success in becoming the advisor your customer never wants to leave.

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.