Only once we’re honest about things can we form a base from which to start improving. You don’t need to spend hours analyzing the WEF’s Global Competitiveness Report to realize how far South Africa’s little economy is behind the world’s best. Just go have a look. Every visit the US reminds me how inferior SA business practices are when compared with the “business scientists” of North America. Once he’d had a close look I side his new parent company Walmart’s systems and processes, Massmart CEO Grant Pattison put it at 15 years. And he’s in retail, apparently one of our more competitive sectors. Of course, being behind also presents an opportunity. There’s lots of upside for those willing to learn. Which is where the value of Ann Nurock’s blog lies. Ann has competed successfully with the big boys. She came back home to run the local arm of Relationship Audits and Management, a global consultancy that measures and optimizes business relationships. Here she shares insights we any wanna-be business scientist will soak up. – AH
By Ann Nurock*
It always surprises me when I read about the value placed on client “satisfaction”. Every study we have conducted concluded that client satisfaction is not enough.
Satisfaction is more transaction based and does not relate to real value or loyalty. A transactional relationship is one where the emphasis is on maximizing sales rather than developing a real relationship with the buyer.
In a study conducted by Bain and Co it was shown that in business between 60-80% of clients who defected to a competitor said they were satisfied or very satisfied when surveyed just prior to their defection.
What businesses should be focusing on is client commitment and loyalty. And for that, they need to look at the relationships with their clients and how they can deliver value. Real value based on advice. And advice which is in line with their business strategy and the real needs of clients
A 2012 report by the Financial Times in the UK captured what is needed. It concluded professional service advisers needed to shift from being partner-centric technical experts to client-centric commercial advisers.
Clients want a more strategic, commercial dialogue with their advisers. Advisers already recognise that they need to develop a more commercial skill-set but many companies have been slow to adapt.
This was reinforced in South Africa by the recent survey conducted in the marketing services sector by our firm. It found middle management lacking in terms of “thought leadership” and being a “ valuable strategic partner to my business”.
While this is a global issue it has also been echoed by the Brand Marketing Council of South Africa’s first Brand Marketing Barometer which indicated that “Brand Marketing should first and foremost understand its role in relation to the business strategy and ensure that all activities are clearly linked to business objectives and should how they contribute to overall strategic intent “.
We have found that everywhere in the world, most middle management professional service advisers in all business sectors are relatively short term thinkers who are also fairly risk averse.
As a result their conversations with clients tend to be about the challenge the client is currently facing and then they propose their solution. What is rare is a conversation about how that challenge fits into the whole scheme of things. How it impacts the vision and strategy of the business.
This needs to change and it is up to professional service providers to understand their client’s business. The cost of not delivering value with the relationships you enjoy is too great, which is why relationships must be value-driven from the perspective of the client and less transaction-driven from the perspective of the adviser.
Then and only then will you be able to have relationships that are not just based on satisfaction and open to defection, but based on commitment and loyalty.
* Ann Nurock is the SA Partner of Relationship Audits and Management, a global consultancy that measures and optimizes business relationships. Ann has over 25 years experience working on some of the biggest local and global brands in her previous roles as CEO Grey South Africa and Canada. Reach her via: [email protected] Twitter @annnurock
