But if we take a closer look at these people, we may begin to understand the rationale behind their huge salaries. Firstly, there are not that many of them. Like superstars and footballers they are few and far between and arguably equally as talented in their respective occupations.
Secondly, they have a great deal of responsibility. RBS Group, for example, employs around 148,000 people. These employees in turn earn salaries and pay their taxes benefitting the broader economy. Thirdly, as a percentage of the bank’s turnover of £40 billion, it isn’t out of kilter. You may consider this viewpoint controversial – particularly as the banking fraternity has a lot to answer for, however, the parallel with customer engagement is a compelling one. If nothing else let’s see how we can learn and benefit from the fat–cats! RBS also admitted it paid 323 code staff – those deemed to be in risk-sensitive roles – £375m last year. Astonishing? Well for the average bank account holder, on the face of it, maybe so. But then we are sometimes quick to vilify people who are paid vast amounts of money – for what seems to be just doing a job.
Most B2B businesses have customers that vary in importance. What I mean by this is their real value in terms of the bottom line. Typically, very few of these relationships tend to be special. These are the customers that you treasure above all others because they represent the very life-blood of your existence. Like bankers, you pay them the most attention, you offer them the best conditions and ensure the service they receive is second to none. You do this because of fear of them reducing the level of business they give you or worse still, the possibility of them moving to your competitors. This isn’t a far cry from the banker’s situation if you consider the analogy.
They are considered by their employers so critical to their business that they earn the right to be treated as something special and this includes writing their own pay checks. It is classic supply and demand. Customer relationships are no different in this regard (and some drive a hard bargain for the privilege!). Some are very special and others are less so. With bankers, they earn the right to hold their positions through knowledge, experience and proven ability to delver results.
The 80-20 principle
They are quantifiable. For businesses, the process of quantifying customers isn’t always so clear cut but it is something you can address to introduce a step change in your business. If you have scanned my uttering’s before, you will know that I am a disciple of Pareto. The 80-20 principle is often so apt for many of the organisations I have dealt with over the years. And it’s the 20% of customers that drive the 80% of your business we need to focus on to make a difference.
Don’t be afraid to look at your customer base with a brutal eye because you may find the reality of some business relationships sobering. So, if you were running a bank and hiring the staff, you would want the best people in charge and this might entail interviewing people that had all the boxes ticked in the relevant areas. What you would end up with is a list of the best of the best to choose from. Wouldn’t it be great if you could choose your customers on the same basis? Well, you might be surprised to know that you can.
If you picture your customers standing side by side in a line ranging from your best at one end to your worst at the other, you would see firstly that customers are different. This may appear to be a somewhat obvious point but the reality is that many businesses are blinkered to this fact and attempt to treat all customers the same – and often to their detriment. It doesn’t make any sense.
If you attempt to offer a gold-star service to all-comers the likelihood is that service will be reduced to average. Rather then offering a base line standard and commensurate service from this point onwards – many opt to lower the bar for everyone and this is surely not what your best customers will expect. To create our imaginary line, we must first categorise each and every customer based on what is determined as being valuable to your business. This again is an important variable because some customers may have low-level relationships with your business but could ultimately become your best customers. So, gathering the correct information that will allow meaningful analysis to be undertaken and profiles to be built is paramount.
Now, if we know who our Treasure Accounts are and what profiles they exhibit on their CV’s, we are in a position to find others that match the same or similar criteria with the knowledge that they represent the customers you would want and the reasons why. These prospective customers are also likely to recognise the synergies that exist and naturally gravitate to your business – after all, like attracts like.At Blue Sheep, we call this process of ‘value’ analysis Money Mapping. It assigns a monetary value to each and every customer. They can then be placed on the imaginary line according to their true value from the very best Treasure Accounts to the very worst which we term Avoid accounts.
Taking a positive step towards understanding your customers puts you in the driving seat to shape future relationships. Seek those Treasure Accounts, develop strategies for nurturing and retaining them and finding more of them. Be brutal with Avoid customers as they stand to hold your business back, cost you money and impact your desired service level. It’s a tough commercial world and winners look firstly at what customers they have and how best to manage them. So, what can we learn from the fat-cats in the finance industry?
Well, it’s all about investing in the right people that will ultimately make the difference between bankrupt, average or great. Great customers are like top bankers – they may be thin on the ground and enormously demanding but you are always better off with a small number of good ones!