Catalytic Management Consulting
Accelerating Growth, Driving Performance

Mom Likes Me Best! The Pitfalls of Client Favoritism

My brother and I are very close in age and grew up almost like twins. While we staunchly defended each other to outsiders, we still had an intense sibling rivalry. When we were really mad at each other and wanted to inflict pain, one of us would yell, “Mommy likes me best! She always gives me the biggest piece.” It didn’t matter if it was a piece of cake, pizza or meat – what mattered was that it was the biggest!

This example of “more equal than others” comes to mind when I hear clients talk about their desire to create named levels of service such as Platinum, Gold, and Silver. This approach starts out with the desire to offer their Platinum customers a higher level of service but often morphs into new pricing strategies that require the customer to pay for the services they used to receive for being, well, a great customer. Tiering customers by the revenue they deliver is common and borne from the desire to build strong, resilient relationships with your top revenue producing customers – an important goal when achieved for the right reasons with the right actions.

But delivering different levels of customer service to stratified levels of customers is a slippery slope. Customer favoritism is risky. There are serious dangers in defining customer service levels by the revenue you receive. Consider these negative consequences:

  • You open the door for your service staff to decide that certain customers are not “worthy” of their time or extra effort. Don’t delude yourself into thinking that your “well trained, dedicated, and highly rewarded” customer service team won’t write off a lower tier customer as unworthy. At the first sign of serious customer anger, the “unworthy” customer will suffer.
  • You give your service staff a ready excuse for not performing at their best ALL the time. “He’s a Silver customer, just tell him the warranty’s expired” becomes an acceptable response to a customer’s genuine problem.
  • You reduce your opportunity to use superior service as way to turn customers into Platinum customers – it’s the old chicken & the egg, “they don’t get the service until they become Platinum.” But remember, you secure Platinum customers by exceeding expectations.
  • You risk losing your Gold and Silver customers to the competition who are eager to turn your customers into their Platinum partners.

Delivering superior service should be the mission of your staff every day with every customer, without fail! Building lasting relationships with customers is critical but there are other ways that are more productive and that tie you and your customer together – mutual success is a powerful driver.

Nurture your top revenue producing customers by building a relationship based on “mutual success”! Encourage, no, require, that your sales team and your service team really get to know your key customers. Understand how your product furthers your customers’ goals and most importantly, how your product affects their relationships with their customers.

Instead of defining your service delivery by the “worthiness” of your customers, consider these strategies for creating and sustaining life time customer relationships:

  • Solve your customers’ problems. Take the time to use your internal expertise in systems, channel development, or recruiting and work out their problem. Solving a problem with no obvious financial benefit to you will earn you years of customer loyalty.
  • Anticipate customer needs; don’t wait to be asked. Go to them with ideas and solutions.
  • Partner for innovation. Collaborate with select customers on new products or services: yours and theirs. Again, mutual gain is a powerful driver.
  • Create a formal, official communication strategy that is more than asking the sales person to “stay on top of the customer.” Unless you build a reward system for this relationship strategy, your sales team will be focused on new business and staying on top of the customer translates only into being there when the customer wants to buy again.
  • Make your customers part of your regular strategy decisions. Invite customer participation in your strategy sessions. Seek their input – but be sure to act on your findings. Don’t ask if you don’t intend to utilize their feedback.
  • Create a Customer Advisory Board with rotating membership that regularly solicits ideas on how you can better serve your customers.

When you create synergistic relationships based on mutual needs and mutual success, you build strong, lasting relationships that drive and increase your revenue—after all, it drives and increases your customer’s revenue. In the valid desire to nurture your top customers, don’t lose sight of the fact that superior service is the foundation for every customer relationship and should never be used as a tool to reward or punish customers.

 

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