Using Software and Savvy to Create Relationship Intelligence

June 10, 2016 Jeremie Bacon

Create Relationship Intelligence

Over the last several years, sophisticated tools for analyzing customer data have made it possible for companies to target increasingly granular characteristics of their buyer personas. The idea, naturally, is to bring more of a personal touch to their interactions. But focusing too much on the quantitative aspects of customer relationships can have the opposite effect. Overly robotic and templated experiences are easy to detect and feel disingenuous to customers. What’s more, relying too heavily on data alone can lead companies to manage their relationships haphazardly.

Because customers have come to expect their vendors to know a lot about their behaviors and preferences, they also expect them to live up to increasingly higher standards of service and engagement. And, in the end, most customers place far more value on the competency of their vendors than they do on the level of personalization associated with each encounter.

As such, it’s a little ironic that, despite all the data at their disposal, and the $36 billion they’ll collectively spend on CRM software in the next 12 months, many companies haven’t a clue about what is happening with their customer relationships. Why? Companies lack relationship intelligence. Allow me to explain what that means.

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So many tools, so much disorganized information

Today, B2B and B2C companies know how often users log into their apps, which buttons they click, and what they’re doing once they’ve clicked them. And yes, most CRM products provide their users with a means to capture activities associated with a sales process, demographic data about the customer, and their purchasing history. This information makes it easier for account managers to bucket customers into segmented tiers and scout for cross-sell and upsell opportunities, but all that data rarely gets shared with the rest of the company.

Other departments are also using different kinds of CRM software to manage their piece of the customer journey: marketing automation, customer support, and project management tools, for example. But, in most cases, all of those systems and the data that sits in them usually stand isolated and alone, used by a single team.

And then there’s the biggest, most overlooked CRM tool of them all -- email. Care to guess what percentage of your customer interactions take place over email, and how much of your company’s collective customer intelligence is trapped in the inboxes of your teammates? I’d be willing to wager a few dozen boxes of donuts that it’s significant.

The point is that, despite their best efforts to capture all kinds of data, many companies aren’t able to take advantage of it. As such, they aren’t cognizant of the variety of touchpoints they have with their customers along their journey. This is due to the combination of inadequacies in the tools used to manage customers and the processes companies have in place for relating to them.

If it’s true that customers want a relationship based on specific and meaningful interactions as well as place value on competency and convenience, what companies need most is relationship intelligence. So, how can companies use all that data to nurture their customer relationships and improve their collective relationship intelligence? I’ve got a few ideas for you!

Profile your customers by relationship type

The first step is recognizing that your customers want to have different kinds of relationships with your company. Some want intimacy, while others prefer a more casual relationship. Figuring out your relationship types is a little like determining your buyer personas. But, instead of classifying your customers based on buyer or user roles, you segment them based on what kind of relationship they want. In order to do this, you need to figure out how they feel about your company, and what they expect to get from you.

For starters, you can buy or build a solution to help you aggregate all your customer touch points into one platform. Think of all those tools I mentioned above: capturing and listening to all that data can help you to pick up on signals from your customers and convert them into knowledge about what kind of relationship they want from you. This is a very different set of takeaways from the quantitative and qualitative data you’re already gathering. Bringing all that information together and making it readily accessible to customer facing teams can help you to improve your organization’s relational intelligence, but it won’t get you all the way to relationship nirvana.

You also need to talk to your customers. Using a handful of ethnographic and psychographic interviews, you can gain a surprisingly deep understanding of what kinds of relationships your customers currently have – and desire to have – with you. I’ve heard of some companies segmenting their customers into ten or more relationship types. I’ve personally never used more than five. The key is to come up with a manageable number that allows you to clearly differentiate between the type of relationships your customers want, and you can manage.

By way of example, at one company I worked with, we had four customer relationship types: Acquaintances, Fair Weather Friends, BFFs, and Partners. The Relationship Type Value Map image below illustrates how we looked at our customers and how we worked with them based on their type.


Create Relationship Intelligence


Our Acquaintances were awesome. They liked us and we liked them. We didn’t interact all that often but when we did, we had a great time. They loved our service and paid a fair price. They weren’t our biggest customers by any means but there were a lot of them and they were easy to work with. Every quarter we would hand-pick a few of them to try to convert to BFFs or Partners. More on that below.

On the flip-side, our Fair Weather Friends were our worst-fit, least profitable customers. They tended to be resource-intensive and were generally takers. Working with them was dangerous because you could never be sure of their expectations which made it hard to satisfy them. Because of that, you never knew if they’d talk badly about you behind your back. We did our best to move this type up or out of our relationship portfolio. If you read my other guest post on the Amity blog, you might recognize these customers as Value Destroyers.

Building BFF and Partner relationships was also resource-intensive and required significant ongoing investment. However, as you can see, they were our largest, most profitable, and longest-lasting customers. Our goals with BFFs were to provide meaningful value, create customer equity, and retain them indefinitely.

Our Partners were amazing. They evangelized us and we evangelized them. Both sides invested heavily and, even though things were never perfect, we each felt great about the relationship.

Our BFF and Partner customers became completely entwined with our company. However, one tricky thing about those relationships was that unless carefully managed, any price increase or change to business terms felt like a betrayal to them. Remember how Netflix lost over 800,000 subscribers in a few months when they suddenly raised prices back in 2011? Major failure in customer expectations management!

Speaking of expectations…

Managing customer expectations is far easier said than done, but it must be a point of focus or else your company will risk disappointing and, ultimately, losing your customers. Once you’ve successfully profiled your relationship types, you can create a playbook and establish service standards to manage them in ways that advance your strategic goals.

A customer playbook – or whatever you choose to call it – is a set of written guidelines that articulate how your company behaves and what it does for customers at every major touch point and stage of the lifecycle. Its sole purpose is to help your teams and customers understand the who, what, when, where, why, and how of your relationship. It doesn't have to be a 500-page policy book but it should cover all the bases. The best ones I've seen take up a few pages per customer-facing department.

Once you've mapped out your customer engagement points, you can begin building a standard of service for each one. As you create standards, patterns begin to emerge in the types of service you can provide to achieve a desired outcome. Use them to distill a small number of precepts you can apply across the whole company. Team-specific processes and guidelines can then be built on top of those universal axioms.

As we all learned in preschool, sharing is caring. So once you've developed your playbook, make sure everyone in your company learns it and knows how to use it. In my experience, it is much easier to get a grip on priorities, stay organized, and deliver when your teams are armed with a playbook -- one that will help them adhere to the personalized standards that are most important to delighting your customers.

If the rules governing your playbook and associated service standards are based on mutually agreeable expectations, you can be confident that your customers will respond favorably when you consistently meet them. Of course, failure to meet them is likely to be interpreted as a violation of the rules and your relationship may be undermined.

Establish a healthy mix of relationships

Once you’ve got your ducks in a row, you can focus on delighting your customers and engineering your portfolio to include the right mix of relationship types. Going back to my example from above, we had a handful of levers we could pull when we wanted to increase the relative proportion of a particular relationship type.

For example, we were always interested in finding new Acquaintances. To increase their number, we tweaked our marketing budget to focus on messages and customer segments we knew were more likely to produce Acquaintances, rather than BFFs or Partners. Once we’d assembled a new customer cohort, we would continue to learn more about them as they progressed on our customer journey map and, when the time was right, we would turn up our efforts to convert some of them into BFFs or Partners. We did that by making a conscious effort to engage with them in ways that exceeded their expectations and gave them a taste of what a deeper, more committed relationship with our brand could be like.

With enough practice, teams get really good at cultivating the right kinds of relationships. Eventually, you can run several relationship recruiting programs simultaneously. It isn’t easy, but it’s a lot of fun!

Invest in Relationship Intelligence

In the end, the key to getting the relationship mix right hinges largely on the level of relationship intelligence that a company can assemble. And -- for better or worse -- relationship intelligence, like customer relationships themselves, is a long-term asset that requires continuous investment. Too many companies fall prey to the belief that the combination of software, data, and analytics is the answer. It isn’t. Although helpful, those things are only variables in a larger equation.


Create Relationship Intelligence


It is easy to make the wrong investment in relationship intelligence by putting your CRM in the hands of third-party consultants, staffing marketing teams with people who have an inadequate understanding of the psychology of customer relationships, or basing customer service responses on automated algorithms and generic templates.

With so many technologies at our disposal today, it is more important than ever that companies focus on more than merely collecting demographic data and statistics about their customers. They also need to focus on capturing real relationship data, the kind that is still mostly qualitative in nature. Investing in the right tools, thinking about customer needs, segmenting relationships, creating playbooks, and developing plans to manage and meet expectations is the sure-fire way to build meaningful, long-term relationship intelligence.

In the end, this combination of big data and relationship intelligence can give companies a clear view into what customers really need and fulfill the decades-old promise of customer relationship management.

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About the Author

Jeremie Bacon

Jeremie is the Co-Founder & CEO of Synap Software Labs. As an entrepreneur, angel investor, and seasoned software executive he has been building SaaS companies since the early 2000s. When not at work, he can be found chasing his wife and 4 children, reading, or eating piles of donuts to power his ultramarathons and other endurance races.

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