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By Anna Caraveli

Reassessing the true value of your relationships with customers

I had thought that, armed with a degree in business, my daughter's career path – unlike mine – would unfold logically and without a hitch. But working for conventional companies and climbing corporate ladders were no more appealing to her than they had been for me. My brilliant – or so I thought – analysis of today's economy and tips for success had no effect. She embarked on an unfocused path of artistic explorations, punctuated by dead ends and disappointments.

A new focus

Then one day, something unexpected came along that captured her imagination and motivated the entrepreneur in her. A challenge! Her boyfriend needed her help to steady his disastrous automobile repair start-up, which specialized in British cars. He had an engineering background and experience with British luxury cars but lacked business skills and, especially, understanding and empathy for clients. Dealing with people was an annoying disruption that was to be avoided at all costs.

Before she knew it, my daughter was up to her eyeballs learning about, re-building and re-branding that business. It did not have much going for it. The shop was small, messy, dark and strapped for cash. There was no capital for marketing or physical improvements. So she focused on its single, most important asset: its customers. She established efficient systems for customer service, developed relationships with each and every customer and centered the entire business on superb and differentiated customer service.

It was not long before rave reviews started appearing in Yelp and other consumer sites and clients brought their friends. The customer base expanded rapidly. My daughter became the architect of a massive transformation and a partner in the company. Profits quadrupled and the shop was moved to new, much larger, airy and luxurious headquarters.

Hitting bottom

Fast forward 6 or 7 years, when a bitter break up with her boyfriend resulted in his attempts to force her out and ended up undermining and finally causing the business to close.

This is the kind of situation parents dread, right? A brilliant but restless and hard-to-fit kid had finally found a direction and achieved success, only to end up back to the drawing board. What now? It was not like she was an automotive mechanic, let alone one with specialized expertise, certification and capital to invest. Clearly, she was the last person to be contemplating starting a new automotive repair business on her own. And yet, this is exactly what she did.

Until then, however, she sat on her living room couch, admitting defeat and wondering how to start from scratch.

Customer-driven start-up

It was then that she noticed a steady stream of phone calls and e-mails. First, it was the mechanics she had hired, developed and included in decisions over the years. They wanted to know how they could help and even offered to invest their hard-earned savings to partner in a new, start-up. Then there were the e-mails from clients, who had heard the news:

  • "I wish you all the best of success and happiness in your new business adventure and look forward to working with you at your new location."
  • "I'm so sorry that it's come to this. I will schedule some time in the next month for an oil change."
  • "As you know, I have been in real estate for over 25 years and would be honored to help."
  • "All the best in your transition! I look forward to bringing my baby into your new location once it's established. "
  • "This could be the new start you deserve."
  • "Wishing you great success!"
  • "Good for you!!! Whatever move is being made, I know it is in the best interest of not only yourself, but for your customers. Where you go, I will follow. 🙂 Please check on which services are next due. I know I need an oil change, but what else can I plan for? I am looking to come by next week or the following. Thanks so much!"

What was going on? Even without a physical location, brand or technical expertise, clients perceived her as still being "in business," asking for automobile advice and appointments. Many were motivated to spread the word and bring their friends and neighbors to her so her new business would grow.

A few customers who had their own shops – dealerships, or other types of automobile services – explored with her various options for locating her new business at their sites. Their assumption was that if she had created a successful business in the past, she could re-create that success with a new business. They wanted to be part of that success and benefit from the new flow of customers she could be potentially bring to their businesses.

It was the force of these customers, potential partners and market demand that propelled her to do something she had never before imagined: re-launch an automobile service business alone, as a woman in a male industry, with a business rather than automotive engineering background. Relationships with, and confidence in, her simply counted more than technical expertise, physical space or gender.

The true, hidden value of customers

Suddenly her story unexpectedly illustrated the theories I had spent my entire career writing about and practicing: that, increasingly, it is relationships, rather than products, that make the difference in the success of a business; that products have short shelf lives and can be easily duplicated, while building relationships and crafting customer solutions do not have a shelf life. Relationships and relationship-driven innovation are portable, flexible and endlessly renewable.

I looked for validation in complex cases of scale, from innovative companies shifting their focus from products to customers, business theory and research. Yet here, before my eyes and in my own family, this story was being enacted with the clarity and simplicity of an allegory, except it was real.

A small business is stripped of all tangible identifiers of a business – storefront, technical expertise, tools, resources and space – and yet remains a business in spirit as long as the people engaged in the relationships that made it work remain intact. It is as simple as that.

Any business is not the sum of its products, policies, governance, original mission and any of the things many organizations cling to for dear life. It is a sum of relationships through which customer problems are solved and value is generated for all involved. Everything else is expendable and should be driven by what creates value for this relationship.

Tips for leveraging your customers' value

There is hardly an organization that will not claim a commitment to its relationships with customers. Yet, if this is indeed your goal, take a hard look at your company's activities and allocations of mind share and resources.

  1. What percentage of your daily activities and priorities brings direct value to your customers? Estimate time spent on meetings and committees devoted to internal issues, such as policy, processes and procedures with almost no impact on the value that your customers experience.
  2. What percentage of your company's/staff's mind share is focused on customers? Compare time spent on the following: developing, running and managing programs and operations to time spent getting to know customers; developing relationships; understanding how they think and perceive the world.
  3. How many of the conversations, priorities and initiatives in your company focus on your customers – empathizing with their challenges and figuring out unique solutions to their needs.
  4. If your organization was to disappear tomorrow, would your customers miss it? Would they be less capable of succeeding without it? And would they follow you regardless of your location, brand or external trappings of prestige because of the value they derived from their relationship with you that they could not easily replicate?
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