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This chapter is from the book

1.4 Building and Managing Relationships in the New Marketplace

The Internet is here to stay. Customers like it because it puts them more in control. Companies like it, too; it's the most cost-effective way to enable most sales, marketing, and support activities. We will talk more about the Internet and building loyalty in Chapter 4. Throughout the book, we'll consider the impact of the Internet-generated issue: how to build trust and loyalty when there aren't at least two people directly involved.

This new marketplace requires that we substitute electronically stored and accessed customer knowledge for the customer knowledge held by sales people and others. We know that fewer and fewer of our customer relationships will involve interactions between two human beings. Information, history, memory, and knowledge are the elements from which we must build relationships. When there is no human interaction, knowledge must be collected and used electronically. We know that customer experiences can be vastly improved by better information. Information about the customer's needs, wants, behavior, experience, and expectations allows us to better understand our customers so that we can:

  • Match our operational processes to known customer expectations tuned to meet specific needs at the best overall cost

  • Build the products we know the customer needs and wants (and leverage customer loyalty to ensure ours are the products customers seek and buy)

  • Build and customize our product and service offerings to meet specific customer expectations

We won't talk much more about product leadership, operational excellence, or even customer intimacy as business disciplines. There is certainly no implied message here that all companies should immediately change their focus to customer intimacy. The Internet has changed what it takes to maintain the minimum acceptable standard within each of the three disciplines. It has also changed, to a varying degree, what it takes to be successful in all of the disciplines. Customer loyalty is a key element of meeting the challenges of the new marketplace for all companies. (Reminder: Key Concepts for each chapter will be indicated by a key symbol.


No matter which of the value disciplines your company has chosen for its focus, your ability to manage customer relationships and build loyalty is critical to your success in the new marketplace.

Using our knowledge about customers will help us meet new customer expectations and new standards. Information and technology will help us manage our relationships with our customers and build the loyalty we need to maintain success. That success is dependent on our collecting meaningful information, remembering it and making it available, and developing tools and processes so that we can use information about the experiences and interactions our customers have had with us.

In the next chapter, we will discuss the approach your company should take to build strong customer loyalty so you can meet at least the new minimum standards for customer intimacy, product superiority and operational excellence.

Questions for Reflection

These questions will help you build a plan for how you'll get started moving your company's CRM program forward. These and other questions for reflection in subsequent chapters are included in the Company Self Assessment in Appendix C.

  1. What is your company's value discipline focus? (Remember, the three disciplines are operational excellence, product leadership, and customer intimacy.)

  2. How do you assess your performance in your primary discipline compared to your competition's performance?

  3. How do you assess your performance in the other two disciplines compared to your competition's performance?

  4. Which of these Internet-caused changes shown in Table 1-1 have had the biggest impact on your customers? Your company?

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