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blog: Relationship Marketing
Honesty In Relationships: Part II
Honesty In Relationships: Part II
Absolute Truth
If there is such a thing as absolute truth, it exists outside of this world. As much as we regard honesty, integrity and trust as roadmaps for relationships, they are relative terms. This represents a risk to business continuity. Any decision you make could compromise your business relationships because of the external impression created by your actions. This occurs even at the most basic level: to choose with whom you want to have a relationship. It is a practical need, yet it is also confining. Since “you can’t be all things to all people” your representation of your well-intentioned relationship is exclusive to these choices. When those whom you exclude put you on the wrong side of their loyalty values we call it pigeon-holing. Marketers are often confounded by typecast restrictions that have been molded around a business by customers with whom it has never had a relationship. And most customers depend on pigeon-holing to sort through their decisions.
Theory of Relativity in Business Relationships
There is a relativity formula to relationships:
THE BENEFIT DERIVED FROM A RELATIONSHIP IS COEFFICIENT TO THE PERCEIVED VALUE OF THE RELATIONSHIP.
From this we learn that the perceived value of the relationship will increase or decrease depending on the value of the benefits gained. Also that the desire to establish a relationship is based on the expectation of its rewards.
Value-Add
The critical idea is that, whenever the benefits gained exceed the perceived value of the relationship, then the perceived value will increase to match the benefits. This is how ‘value-add’ expands loyalty and frequency into business continuity. Adding value makes the difference between a performer and a super-performer in business relationships. It is the ingredient that can break a business out of the mold of typecasting e.g. to enable a volume discount producer to enter a luxury market (Toyota/Lexus). It is also the most challenging component of sustaining a relationship, as the constantly rising of the bar of expectations represents greater consequences to underperformance. You can never go back to ‘ordinary’, because that would be a reduction in value. But, that issue aside. everyone can live with thought that continually adding value creates a consensus in relative truth.
Pull the Wrong Lever And You Fall
Perceived value and benefit rewards are so closely linked that misguided use of any levers in the relationship can create schism and distrust.
Take, for example, wholesale price discounting: once the customer has experienced a price discount, this benefit reward can easily become a defining aspect of the relationship. The customer expects the lower cost. In counterpoint, the retailer gets reduced benefit from the transaction, so its sense of value decreases. We now have relativity divergence in truth and trust: the customer’s benefits have increased and the retailers value of the relationship has decreased. Consequently, the retailer may compromise the value of the relationship to the customer, by merchandising lower quality goods, reducing customer service, reducing product selection etc. Retailer’s view of truth: my customer is a price chiseller.
Customer’s view of truth: my retailer is a price chiseller.
Neither position might be true. The reason for the contradiction is that the retailer used a market lever that was counter-productive to increasing the value of the relationship.
The 365-Day Sale
Price in retail has become the most common lever used by retailers to lure customers, and in juxtaposition, customer service and satisfaction has dropped. It has been replaced by refunds, warranties, and call centres. Recall our formula for relativity: the customer expects more from the relationship relative to price, but experiences the negative impact on other important components of the relationship such as service, quality or choice. When relative truths are in conflict, each party will withdraw to its corner, exploit for its own interests and abdicates loyalty when these are not served.
Addiction Vs. Loyalty
It is the predicament of our market mentality that the most successful business is the bottom-feeder in the cost/price matrix. I would argue that customers are not loyal to Wal-Mart – they are addicted to Wal-Mart. Wal-Mart has built its customer relationship on the price lever, and expands the benefit rewards it brings to its customer by expanding its range of merchandise with the same promise. By focusing on this one lever, Wal-Mart has worked this relativity formula consistently into tremendous profitability. How does the formula work for Wal-Mart? The benefit its customer gains from shopping at Wal-Mart (price) is maximized by consistently shopping at Wal-Mart for all its needs, and so the perceived value of the relationship to the customer has matured into a dependency. The consequences to the retail sector are widespread. Everyone is chipping away at price and we live with a discount mentality. There is no consumer segment that Wal-Mart will shirk from if it can consistently achieve its goals. PRICE is now the relative truth that has redefined many marketing relationships and reduced them to just this one lever.
But price-sensitivity is not the only lever for the sustainability of a relationship. As long as it is built on honesty and trust as defined by the customer’s needs within the relationship there are other levers that influence purchase decisions.
Segue
I had planned to spend more time in this entry discussing these other levers. Let’s say for now that the purpose of this entry – to demonstrate how truth is relative to the customer and that a practical business action could have a correspondingly unfavourable customer reaction – is served. Every action a business takes has consequences that are broader and deeper than it usually prepares for. This is because it rarely focuses on truth relative to its customer’s perspective.
Honesty in Relationships: Part I
When goals-achievement is the number one priority of a business, the temptation to disguise weaknesses is a real challenge for marketers and legal departments. I remember a copywriter complaining that her clients always ruined her copy by insisting on accuracy. The creative fabrication sold the product so much better.
Too many businesses market their beliefs without testing their own integrity. Expressions like ‘Best’, ‘Leading’, ‘#1’, ‘Lowest Price’, ‘Largest Inventory’, ‘Top Rated’ and ‘Most Successful’ appear throughout marketing copy. The customer who finds a lower price elsewhere will not trust such a claim again. Once the veil of honesty is damaged by the revelation of deception, whether big or small, trust evaporates and is hard to recover.
The Alchemy of Concealment
The temptation to deceive or conceal the truth is part of the human psyche.
Q: “How’s business?” A: “Busy.”
The truth remains agreeably hidden. But, when truths are revealed there can be significant consequences. Consider the impregnable Bike Lock that was opened using a Bic pen. Is it possible that the market leader in bike security products didn’t want its vulnerability to be known? Or was it an unfortunate embarrassment? However framed, doubt formed in the mind of the customer. There are PR companies that specialize crisis communications, when a damaging truth is exposed in an unforgiving world of customers demanding an explanation. Enron. Blatant. No mercy. Once a lie is exposed, society has the will to vilify the perpetrators and to extract their confession.
A Study of Truth & Deception
As a child my elders posited my future in advertising. My wisdom of nine years replied, “Why would I work in a job that is about telling lies.” I had experienced the disappointment of the picture in the ad being better than the product inside the box. Another rule I picked up was: “Don’t trust show-offs. They only please themselves.” A business that exaggerates its delivery cannot be sustained.
As an adolescent, in order to get out of trouble, I learned that the most believable lie is the one that is closest to the truth. Marketers are often pressured to tell the ‘closest’ version of the truth to make their employers or clients succeed. I learned a law similar to the law of gravity when it comes to misleading people: the bigger the deception, the bigger the fall when the truth comes out. And the truth has a way of coming out. I won’t reveal the details of how I learned that lesson, but it was learned well. The more we mislead customers, the greater the repercussions we will have to endure.
At the age of 19 I came to the realization that, if I acted in good conscience, there would be no cause for deceit. As a customer-centric marketer for 11 years, and a career marketing professional of 20-something years, I am able to demonstrate to my clients that if a promise is not credible and deliverable to their audience, it is counterproductive to their objectives.
Putting Values on Truths
Honesty in marketing relationships is about truly representing and supporting what is important to each customer. Failure to deliver on a marketing promise is tantamount to a lie in the customer’s dictionary of business terminology. Your integrity is really defined by your commitment to the relationship. Any actions and statements that could prove damaging to the relationship need to be thought out ahead of time and revised.
The focus of customer-centric marketing is to understand truth from the customer’s perspective. Touch Marketing, the technique I practice within my studio, is the determination and communication of customer values (their truths) with emotional relevance and the demonstration of commitment to support those values. This is counter posed to the product (or brand) as ‘the hero’
By looking through the other end of the telescope I have come to realize that trust is what bonds a relationship, and honesty is the basic ingredient.
Touch Marketing is not just honest and emotionally relevant – it engenders attachment, loyalty, frequency and continuity within a marketing relationship. Experience is the truth the customer believes.
The next part of Honesty in Relationships will discuss how to shift perspective away from what the business inherently believes towards the customer perspective.