I have been away for a while, and have not posted here for two months. The reason: I have have been writing a book on Account Planning. The book is now finished and will be available in March. (Let me know if you are interested and I will email you when it is available.) Some of the early reviewers had very positive things to say about the chapter in the book on Trust, and felt that Trust is an undervalued business asset, so I decided to serialize it here in a few posts. Here’s the first.
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If you want to build a long-term customer relationship you need to develop a deep level of trust with that customer. Customer acquisition is easier when you are starting from a foundation of trust. Once you have a Customer, converting that Customer to a Loyal Customer will happen only if the Customer feels that she can depend on you. Unless you achieve that level of trust your Customer will become a Former Customer.
Trust is the fulcrum upon which every customer relationship pivots. Trust is a valuable currency that must be earned, but never spent. Trust is built one step at a time, and unless protected, can be blown away in a moment. Account Planning is all about developing long-term relationships, and that is hard to do without trust.
Here’s an illuminating story.
When Angela called one spring day, the excitement coming over Skype was contagious. Angela was CEO of Kincometrics, a small software company serving the pharmaceutical market. Recognizing that selling to large pharma companies was going to be very difficult for a small company, as part of her go-to-market strategy, Kincometrics had partnered with a large well-known enterprise software company. For the purpose of this story – and to protect Angela’s business – I will refer to that company as BigSoft.
Angela’s face lit up as she told me that she had accompanied one of BigSoft’s sales executives to a meeting with BigPharma. (No, that’s not its name either!) The meeting had gone exceptionally well, and Kincometrics was on the verge of its largest deal ever.
In Angela’s words, the background went something like this:
“BigPharma had put out a RFI to a number of regulatory compliance system (RCS) vendors. It’s important to note that BigSoft does not have an RCS offering, so it would not have been able to complete the RFI without our company. They requested only three of the vendors to complete the RFP, and happily we were one of those. The RFP was followed up by web demos initially and then an on-site demo. The relationship between us, the BigSoft team and the BigPharma team started off really well.
BigPharma’s team felt more and more comfortable with the subject matter expertise of our team. The reason for this was that two thought leaders in our space represented Kincometrics. We had two PhDs (chemistry and microbiology) with extensive laboratory experience. As a result we could relate well to the day-to-day operations of the proposed end-users.
A number of web meetings followed the visit and then another on-site demo and discussion about implementation. We highlighted the extremely tight partnership between Kincometrics and BigSoft. This was clearly important to James, the CIO from BigPharma. Pretty soon it became apparent to everyone on the team that James was leading the decision-making process here. He felt the need to have a vendor who not only had the correct technology solution but also had a clear focus on the pharmaceutical industry. This would provide them with the support to expand the implementation as BigPharma deployment grew.”
Angela had called me to tell me that the meeting she had just attended was the final step in the budget approval process. She had won the business! Kincometrics was the preferred vendor and the price was acceptable. James, BigPharma’s CIO, confirmed that he was very comfortable with Angela’s team. He expressed his admiration for the unique design of Kincometrics’s RCS software, and said he was reassured by the partnership with BigSoft. What could go wrong?
Unfortunately, the story did not end there. The next call I got from Angela was not as positive:
“James requested a meeting with the new CEO of BigSoft, Kincometrics’ partner, and made it clear that this meeting was just to confirm his decision that he could rely on the technology support and domain expertise of the joint team. He made it clear that he preferred the Kincometrics solution. His only concerns were ongoing support and confidence that BigSoft was sufficiently focused on BigPharma’s future needs. Kincometrics was not represented at that meeting. That was a huge mistake.
After the meeting between the CEO of BigSoft and BigPharma CIO, the BigSoft sales guy who was at the meeting said, “This was the worst meeting I’ve ever been at in 30 years of selling. Even though I prepared everything that the CEO needed to bring this deal home, he totally screwed it up.” He was talking about his own CEO, the face of BigSoft!
The BigSoft CEO spoke only of the many changes that he planned to make now that he had taken over at BigSoft. He talked about the other industries that he had yet to conquer: Government, Finance, etc. He talked … and talked … and talked, and did not listen to James, the BigPharma CIO. Two weeks later we got the news that BigPharma would stay with its incumbent system, making further modifications to that rather than deploying the Kincometrics package. It’s a disaster!
The CIO from BigPharma emailed me to say he was sorry, but he felt that he could not trust BigSoft because, even though he said otherwise, James felt that the CEO of BigSoft was following only his own agenda. The CEO promised him that he would support their deployment, but did not listen to BigPharma’s concerns. The trust that Kincometrics had built up over the previous number of months was lost.
To add to the irony of the situation, during the main-stage presentation at the BigSoft Sales Kick-Off in July, roughly a week before being told we had lost, the BigSoft CEO mentioned the great meeting he had had with the BigPharma CIO. He emphasized the importance of getting a deeper knowledge of our customers and a greater understanding of their needs! This was exactly what he had not done. He did not really care about the customer.
You know, I’m not angry at BigPharma. I’ve met the new CEO at BigSoft, and I just can’t believe a word he says. I just can’t trust him.”
Angela’s story is completely true, even though obviously the names have been changed. It is a sad story. Angela had done everything right. Her product was a winner. She had tried to mitigate the risk of being a small company by partnering with BigSoft – but that was before they hired the new CEO. Angela had spent a long time building up trust with the CIO of BigPharma, but that was completely blown away in one foolhardy moment, by an arrogant ass.
Complete trust between people is infrequent, and between companies and individuals even more rare. Trust is not attainable by request or appeal and it is not transferable. It has to be earned. Trust sits on the three pillars of authenticity, integrity and honesty; promising only what you can give, and giving what you promise. Attitude and preference, as they relate to how a customer thinks about your company, are as likely to be informed by whether a customer feels they can trust you as by the capabilities your company can provide.
However, in many cases, companies have defaulted on their obligations to customers, who feel ignored, poorly treated, and often perceive that their concerns as customers or consumers are rarely heard. I refer to this as the Trust Default.
There is no question that trust in business has become more elusive. According to the 2012 Edelman Trust Barometer, just 45% of customers in the US trust businesses. In Europe, the situation is worse. Across the United Kingdom, France and Germany, less than one-third (31%) of customers feel they can trust business. The banking crisis and subsequent bailouts across the world have combined to infect industry in general, and financial services in particular, with a lingering malodorous tumor.
As a consequence of the Trust Default, developing trusted relationships with customers has never been more difficult. On the one hand the consequence of this is that the task of establishing true customer affinity might seem a little ambitious. But, on the other hand, if you are prepared to make the journey, you will find that not many others have joined you on the voyage. When you arrive at the destination you may well find that your only companion will be your customer.
From my perspective, what happened during the economic turmoil of the last decade was not so much a recession as a fundamental restructuring of the economic order. This is a good thing! It has forced us once more to focus on true difference versus positioned differentiation. To address the Trust Default, it has demanded a focus on values and ethics, underlining the value of trust as an asset.
We should recognize that, while honesty and integrity as propellants of commercial energy have not necessarily always been the most comfortable bedfellows with the pursuit of profit and revenue, what is scarce is valuable. If you are prepared to address the Trust Default, you have the opportunity to gain a considerable advantage over your competitors.
The next post in this series will deal with the Changing Shape of the Trust Circle