Podcast Episode #5: The Danger And Power Of Customer Best Practices

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.

My name is Jermaine Edwards, your customer growth guide. In this episode number 5, we're going to talk about a topic I believe no one has really thought about this as much as me. Now, however, you might be one of those people, as I explain the topic, that has. And I'd love to get your perspective if that's the case. But I want to speak about one of the most dangerous topics that an organization often ignores but is fundamental to how they serve and continually serve successfully their customers, and that's customer best practices, the best practices we use to go out and deliver great results with and for our customers. Now, oftentimes what we see the opposite, failed initiatives that are often hidden within the cost sheet and blamed on external factors. These costs to really failed initiatives, failed best practices, are attempts to implement something without really common knowledge on understanding why we're using a specific best practice, what problem we actually trying to solve, and understanding that just because we hear of a case study somewhere else, it actually doesn't make it more applicable to us, and it doesn't make it more applicable for a number of reasons. So I want to help you make careful evaluations of the best practices that you see so you can understand which ones you should really be focusing on, or at least be more cautious of when trying to implement it in your business, so you can more successfully implement these ideas, solve the real problems that exist that might be preventing you from serving your customers as well. Evaluate your customer best practices to ensure that they're working the way they should. And at the end, I'll give you a complete framework called the RARE model to help you make those choices for any other customer best practices you choose or would like to implement in your business. So let's get started here. So the big thing I want to share with you to start with is I actually genuinely believe that all we've been told about customer best practices are killing our ability to yield real repeatable results with our best customers. But what do I mean by best practices? Well, a customer best practice ideally should be a careful evaluation of a process, solve a specific problem, be of high value to your customers, adapt to specific customer needs and businesses, generate repeatable results. So it needs to have your really careful evaluation of a process, solve a specific problem, be of high value to your customers, adapt to specific customer needs and businesses, and generate repeatable resources— and that repeatable results, I should say. But also, hey, one or more resources within your business. But ideally should be able to cover those 5 factors, and those 5 factors are really, really important, and we'll get to know why that's important in just a moment when we talk about what influences the actual viability and the longevity of an actual customer best practice. Now, what is often seen today in many best practices is that it's often the result of, you know, an evaluation of a process, you know, methodology or framework that has had success for a group of companies over time. And oftentimes when we hear these success case studies of particular customers, we see the stats, we see the testimonials, we make, we make the case, you know, internally that we should be doing it too because this company is delivering this particular methodology. The challenge is when we hear these practices and success stories, we miss 4 critical components. Number 1, the effort and coordination really needed to make a best practice work. We don't see that in the testimonial, uh, in the conversation or story you might hear from a particular company. Number 2, the resource, talent, and maturity of the company executing the practice. We often don't hear that either. Number 3, their customers, who may have very different views or requirements in regards to engagement. Number 4, the industry they're in, which in almost all cases changes the application or the execution or even the structural delivery of a practice. So if we take these 4 things in mind, the effort and coordination, the resource and talent maturity, their customers, and the industry. What it means is we need to apply an accurate filter for understanding, is this best practice right for us right now? And does it actually solve, if we do want to take it on, the actual problem we want solved and the outcome and results that we want? We'll come to that in just a second. So this doesn't mean best practices aren't relevant or helpful. They very much are. Many best practices I'd advocate for. What best practices show us today is something much more important, that customer best practices by themselves don't solve problems. Good analysis of the problem you want to solve and the execution of the right practices to achieve your outcome does. So I'll say that again. Customer best practices don't solve problems. Good analysis of the problem you want to solve, and then the execution of the right practices to achieve your outcome and result does. That's really important for us to understand. So then if that's the case, if customer best practices don't solve problems, but they're part of helping us to solve a problem, then the equation must then be analysis times right practice equals results. And there is a methodology which we're going to think about in just a second. But the first thing we need to do is understand what influences customer best practices. So why do some specific best practices fall out of, you know, relevance and really kind of effectiveness over time when it worked for so many companies at one point in time? Well, customer best practices have changed dramatically. Let's just take the last 50 years or 200 years. It's completely shifting. And there are 3 main factors that impact the viability, the longevity of a specific best practice. Number 1 is customer behavior, 2 is new technological practices, and 3 are global market relationships. You have these 3 things. If a particular model cannot bear the weight of changing customer behavior, new technolo— technological practices, and global market relationships, and what shifts in our market, it's unlikely to be able to weather the storm and continually provide the kind of value or perceived value to your customers. So we need to hold that in mind because they all interact together in some way. So how do we begin to evaluate our current best practices? Well, we can actually use a couple of questions, maybe 3 or 4 questions in fact, to help us understand the impact of our best practices today. So let's take this first question. Do the existing best practices we have currently solve the root cause problem we have identified? To do the existing best practice, customer best practices that we have currently solve the root cause problem we have identified? You may want to just make a note there. Then number 2, do the current best practices we have give us the same the same or greater results intended each year? That's a reasonable question, right? Do the current best practices we have give us the same or greater results intended each year? Number 3, are the current best practices we have viewed as equal to or of consistently high value to our customers? Are they viewed as equal to or of high value to our customers? What our customers think about this stuff, how they respond to it, how they engage with this stuff. Number 4, do the current best practices we have give us a unique differentiation advantage that is tough for our competitors to replicate? So does it give us a unique differentiated advantage that is tough for our competitors to replicate? Now, these are really powerful questions. I consider going back in just a, you know, a minute or so, listening to these questions again, or going into the blog— I'll be in the show notes— to capture these questions and ask them with your teams internally. But these will reveal a lot about how effective your customer best practices are. If you find that after answering these questions, you've answered No, or you're unsure about any of the answers to this, it may be that the custom best practice you have is either 1, just not as effective as you think it is, or 2, maybe it's just not the right kind of solution you need right now. It may just be becoming irrelevant or not as relevant to achieving the root cause problem you want solved. That leads us really nicely to how to evaluate and apply a best practice. So I want to introduce you to a really simple framework that will help you and your organization make more confident decisions about the customer best practices to use. I call this the RARE model, something we developed alongside our customers to really think about how we, you know, look at the marketplace and apply best practices. There are a lot of really great ideas out there, really great initiatives, great success stories. We just want to find the ones that really give us the kind of results that we're looking for and can hold hold up against the weight of the change that I discussed that changes and influences customer best practice. And those 3 changes I mentioned were customer behavior, new technological practice, and global market relationships. If we know they can hold under those, the weight of that, we know it will be consistently successful and really powerful best practice for us to use. So Let me introduce you to the RARE model, and this was designed specifically to identify the right practices that solve real problems to generate repeatable results. So the first R in RARE is Root Cause. You must first really understand exactly what the real problem you're trying to solve is, and this root cause analysis initiative, oftentimes we skip over this because it can be quite painstakingly slow, but I'd rather go slow and be go right more of the time than go fast and be wrong more of the time. And sometimes slow is fast and fast is really slow. And we need to be able to take the space to really go into root cause and understand the problems we're trying to solve. We don't understand the problem we're trying to solve. We can't possibly get the most accurate solution or understand exactly what kind of resources needed to be applied to get the outcome that we want. The next letter in RARE is A, which is Advantage. So we need to determine what advantage we actually want the outcome to create. So let's just give an example here. Let's just say that the, the root cause problem that you found was the, um, was the problem was high customer churn. But actually, the root cause problem may be that you need to increase customer contact to catch signs of dissatisfaction early. That might be the real root cause, is that you need to increase customer contact to catch signs of dissatisfaction early. So then you recognize that, okay, so we want the outcome of reducing churn each year. However, that by itself is not the full picture. What we actually want is to create a system of managing the retention of customers at scale without increasing costs to give you the advantage. That's probably what we want instead. We want definitely the outcome of reducing churn, but we want to be able to do that at scale. So that's the advantage that we want. We don't just want to reduce churn, we want to be able to reduce churn at scale. That's the advantage we want. The outcome we want is to reduce churn, but the advantage we want is to do that at scale. Very, very different, but you need to separate those two.

What's the outcome?

What's the advantage? So then you can choose something that helps you to do that. Outcome, advantage, reduce churn, scale. Really helpful to think about those two. Then once you've gone through root cause and advantage, you now should have, you know, literally the criteria here to help you shape or decide what kind of best practice you should be looking for. So the criteria questions based on the example I gave you of reducing customer churn might be, Will this help us reduce churn? Does this give us the advantage to adjust to scale without increasing cost? Two really simple questions, but now it gives you a criteria, a filter to ask different questions to understand what best practice is going to be most helpful for you. And these won't be all the questions you would ask. You may have other different advantages you want to create through the outcome., and you would have to sit down and think about what they might be. But the next letter in the RARE model is R. So once you've chosen the best practice, we need to remodel. And I'll tell you this, I've never experienced the implementation of a best practice that hasn't had to have some shift in approach for an organization. So you must be open to remodeling how the business takes on and usurps that particular best practice. So once you know what what it is and you want to adopt, you know, what that, that result is for you, you need to now evaluate what you might need to stop, start, or change internally to yield the outcomes and advantages you want. So that might look like, okay, you may need to change the customer communication process, you know, to capture feedback at identified stages in the customer journey. So for you to really capture the whole idea of the advantage of reducing churn and increasing customer contact, you may need to internally change the customer communication process in order to facilitate that and to capture the feedback you need in the customer journey. That might be what you may need to remodel. But for you, you need to have that conversation. What might need to be remodeled in the business, either stopped, started, or changed in order to really capture the full benefit and advantage from the best practice? Then once you have that, the last letter is E. That's to execute. So we need to decide and fully commit to the remodel and ensure we act on what's most important. We track what is measurable, and we obtain feedback often from the team. So we need to schedule, maintain weekly calls to hold the team accountable to key actions and address those challenges and evaluate those outcomes. So those are things I wanted to share. It's really, really important We have the RARE model that helps us to evaluate, uh, you know, the right best practices for our business. R for root cause, A for advantage, R for remodel, and E for execute. And you can find more about this in the blog. I'll give you a little more detail if you have the space to read. But essentially, it's so, so important. If you don't weigh the cost of your decisions on customer best practices, it's likely that you're, you're implementing something that is eroding in perceived value to your customer and actually costing you money in implementation, and you don't want that at all. You want to quickly identify those best practices and give a score or a way to measure and evaluate how effective it is. You can use those 4 questions I gave you earlier to begin that process. So let me give you a recap of 5 big ideas here. So 1, customer best practices don't solve problems. Good analysis of the problem you want to solve does, and the execution of the right practices is number one. Number two, not all best practices are designed to meet the future goals of your customers. So because best practices are influenced by those three areas I mentioned around the customer behavior, new technological practice, global market relationships, you need to be sure that the actual best practice will hold under the weight of those changes. Not all best practices yield the same results for everyone, so we have to remodel. We have to think about what might need to change in our business to fully adopt this best practice and get the results that we want. You have to do that. Customer best practices are impacted often, and it happens often more than you think. Sometimes we might implement a specific best practice and all of a sudden we recognize were changing something in the practice 2 weeks later because you recognize something has changed. So we need to just be open to the fact that actually change is happening because customer behavior, new technological practice, global market relationships, something is taking place that's shifting the way in which you might think about those practices. The last thing, something I didn't cover necessarily, but I think, I'm thinking about, is really important, is that most customers shop for convenience and not commitment. So earning their loyalty really takes more than best practice. It has to be a deep understanding of their future needs and current behaviors that drive the value perception with customers. So customers shop for convenience and not just commitment— and not commitment necessarily, that happens over time. When you're trying to earn their loyalty, it's much more than the best practice. It's a commitment to really deeply understanding the future needs and current behaviors of your customers and understanding what, what value will drive their perception both today and tomorrow. And this is why the best practices we adopt are so important, because we want it to facilitate and help us to, you know, begin to engage the customer on a regular basis in a way that's effective for them moving forward. And so this is— these are some really interesting things to consider to hold in maybe your customer meetings and your internal meetings. Ask these questions, ask them to your customers to see how well they're thinking about their own best practices in their own businesses so they can begin to benefit from these ideas. That customer best practices don't solve problems. Good analysis and problem The nature of the problem, I should say, you want to solve is, and the execution of the right best practices to achieve your outcome. If you can hold that in mind, custom best practices don't solve problems, and you need to have a way in which you evaluate that so you can choose the right best practice for you. You'll almost always have much greater success in implementing because you'll have more confidence. You can communicate that more clearly to the business. In terms of the outcome and the advantage that you're getting, and you'll get much more buy-in from the teams to go and implement. So I hope that's been really helpful to you. If it has, please, please, please like, share, you know, comment, email me, whatever that might be. I'd love to hear from you to make sure these specific episodes are as valuable as possible, and I'll see you in episode 6.

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Wishing you success in becoming an irreplaceable advisor.