How equal are your relationships with your customers?

How equal are your relationships with your customers?

The equality of the relationships that businesses have with their customers was an idea that came up in a recent interview that I conducted with John Marick, the co-founder and CEO of Consumer Cellular, the awarding winning provider of cell (mobile) phones and services in the US.

Consumer Cellular is a rising star in the US wireless space and their year on year growth and ability to compete with the big players is underpinned by some simple things:

  1. They Focus – Rather than going after high-use business customers like most of the big players, they focus on attracting casual mobile users of all ages. Over the last few years, they have developed a particular focus on the senior (50+) market.
  2. They Give Customers What They Want – Driven by what customers say they don’t like about traditional mobile/cell phone providers, they have done a couple of things. One, Consumer Cellular operates an US only call centre team as they believe that hearing a familiar voice/accent is an important part of establishing trust and rapport with their customers. This is doubly important as they don’t have a retail presence. And, two, they have abandoned any form of customer contract and allow their customers to scale up or down their payment and usage plans, at any point, without any long-term commitment or incurring any penalties.

However, the thing that stands out for me is not what they do but why they do it, particularly why they adopt a no contract approach.

When I asked John about this, he said that they know that their profitability is all about about how long their customers stay with them. They also believe that they can earn their loyalty by always delivering value and great service to them. This, in their opinion, doesn’t require a contract.

John also added that, from their customers perspective, the removal of a contract ‘equalises’ the relationship between them and Consumer Cellular. This has a huge impact on how their customers feel and behave but it also has a huge impact on the firm’s behaviour. There is no slack. There is no time to take it easy. Every moment, every decision and every customer interaction counts.

This doesn’t mean that they can’t and don’t make mistakes but it does mean that they have to stay focused on service and the value that they deliver as they don’t have a contract to fall back on.

For them, it is the value and the service that they deliver and the emotional ‘credit’ or track record that they build up with their customers that determines their loyalty, not a contract.

The finance, legal and risk department may not like this type of approach but customers do. According to the latest Consumer Reports survey, Consumer Cellular’s customers gave them the top customer satisfaction ranking of any wireless provider in the US last year and they have done so, repeatedly, for the last few years.

So, does that mean that contracts are a thing of the past?

I don’t think so. Contracts can and do play an important part in many customer-business relationships.

However, what Consumer Cellular’s example shows is that thinking about the conditions of your relationships with your customers and innovating around them has value and opportunity in it.

Therefore, I leave you with some questions:

  • How ‘equal’ is your relationship with your customer?
  • How do they feel about it? and
  • What can you do to make it feel more equal?

 

 

This post was originally published on my Forbes.com column.
Photo Credit: marfis75 via Compfight cc

Comments

  1. Hello Adrian,
    Interesting post.

    Your assertion ‘thinking about the conditions of your relationships with your customers and innovating around them has value and opportunity in it’ resonates with me. To me this is what CRM (as a business philosophy and practice) was supposed to be all about. This is what customer experience design-innovation is all about. And yet few are willing to walk this path.

    Maz

    • adrianswinscoe says:

      Thank you, Maz.
      I agree and I applaud what Consumer Cellular has done and hope that other firms take note.

      All the best,

      Adrian

  2. Adrian,

    I find it fascinating that they realised that the key to their profitability was the length of time customers stayed with them and then threw away the easy option (the contract).

    I guess this then forced them to be creative in their approach to problems and no doubt resulted in a range of innovations that the big companies would only dream of.

    James

    • adrianswinscoe says:

      Hi James,
      Yes, indeed, it’s fascinating how by giving up the ‘anchor’ that is a contract it forced them to continuously focus on delivering value to their customers.

      It seems to me that the major barriers to larger companies following a similar path would be fear and lack of belief that they deliver sufficient value to sustain such an approach. That, in of itself, is very telling.

      Adrian

  3. Any time an organization focuses on the customer experience, including being easy to do business with, allowing customers to interact/transact the way they want to, and more, they win. Good for them!

    Annette :-)

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