Growing Business with Better Relationships
Ultimately, every business is dependent upon relationships. Relationships with Customers. Relationships with Suppliers. Relationships with Employees and Co-Workers. The organizations that manage these relationships better, are the ones that grow and prosper even in changing and challenging times. It simply makes good business sense to build a team of people who are good at building and maintaining relationships.
Net Promoter Score
In his award-winning book, “The Ultimate Question 2.0” Fred Reichheld outlines all of the significant business advantages achieved by the companies that do this well. Customer Loyalty, as Reichheld attests, is the ultimate measure of a successful company. His Net Promoter Score (NPS) measurement system is being implemented from the Fortune 50 down to those local businesses with 40 or 50 employees.
Reichheld has identified a direct correlation of NPS to Customer Retention Rate, Customer Spend, Margins, Decreased Marketing and Sales Expense, Cost Efficiencies, Growth, and Market Share. Interestingly, he also identified that these same companies who rank highest in their External Customer Loyalty (NPS) also ranked highest in their Internal Customer, or Employee Loyalty (eNPS). It is a reasonable finding when you consider the fact that most, if not all, customer interaction is handled by font-line employees. If these employees are not loyal to the company they work for, then their attention to the relationships with their customers will likely suffer.
Frightening Results
In his original research, Reichheld found that, “… the average NPS for U.S. companies is less than 10 percent. And if that’s not dismal enough, there’s an even bleaker phenomenon lurking within the confines of corporate plants, stores, and offices.” He and his team found, “Only 39 percent (of employees) trust their leaders to communicate openly and honestly. Only 33 percent believe that employee loyalty at their company is appropriately valued and rewarded. Only 28 percent say that their company values people and relationships above short-term profits.”
He goes on to say, “… only 19 percent, fewer than 1 in 5, can be considered promoters – people who can be counted on to provide enthusiastic referrals for the company that employs them.” He calculates the average Employee Net Promoter Score in U.S. companies is a paltry minus 29 percent. “In other words, detractors (negative employees) outnumber promoters by a wide margin in businesses across North America.”
The Relationships That Need to be Right
Many organizations are failing at relationships. They are failing to implement the systems that provide for clear communication, failing to clearly identify expectations and priorities, and failing to send the right messages throughout the entire organization. As Reichheld says, “If the front-liners aren’t excited about what they do for customers, it’s unlikely that customers will be excited about what is done for them.”
Reichheld cites a shining example of an organization that gets relationships right. John Young, a former HR Executive from Four Seasons (A Fortune ‘Best Company to Work For’ for 8 consecutive years), recalled the scene when Four Seasons was first listed on the stock exchange, and the president of one of their investment banks hosted an event to celebrate. Per Reicheld’s account, “The investment banker told Young how much he admired Four Seasons and how he aspired to build the same kind of service culture at his own firm. Young responded with Four Seasons-style precepts: First you must decide what you stand for, and then you must align every one of your systems to reinforce it. You recruit for it, you select for it, you orient for it, you train for it, you reward for it, you promote for it, and you terminate those that don’t have it.” When the banker chuckled and replied he would have to fire some of his best people to do that, Young’s retort was, “Then stop kidding yourself!”
Decide what you stand for – your core purpose, and then align all of your systems to reinforce it. This requires discipline and commitment. And it requires a focus on building and maintaining solid relationships. Recruiting and hiring based on how well a person fits into the organization, and how well they handle relationships, and then orienting and training those same people in the skills necessary to build and maintain relationships.
Skills Associated with Building and Maintaining Relationships
Understanding relationships is no simple task. People are so unique and complex that there is no easy formula, but there are skills that can be developed.
- Understand Your Own style – How you like to communicate and be communicated with, and what styles and communication approaches cause you anxiety.
- Understand Other Styles – There are a multitude of behavioral styles out there. Understanding what they are, how they like to be communicated with, and most importantly that they are based purely on habit, allows you to adjust and adapt as needed to develop and keep positive relationships.
- Understand Your Values – What driving motivators you have, how they motivate you, and how they can cause conflict with others
- Understand Other Values – Other people will be motivated by different values that you have. Understanding those values, how to read them in others, and understand what is important to them, allows you openly discuss and debate issues without either party taking offense.
- Crucial Conversations – Learn how to handle “Crucial Conversations; Tools for talking when stakes are high” Patterson, Grenny, McMillan, Switler
- Understand and Develop Emotional Intelligence – Our Empathy is our Social Radar
- Learn how to Listen Attentively – The greatest act of caring is listening.