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Blogrige

The Official Baldrige Blog

Building Customer Relationships: Is This Love, Friendship, or Just Good Business?

By: Christine Schaefer

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Wrapped birthday present

Used with permission.

Credit: Clipart.com

My last birthday came and went with little fanfare. Naturally, my mom and a few friends remembered the occasion, and I received VIP treatment from my family for a day.

I've never been a "birthday diva" and, thus, didn't expect a bunch of presents or even greetings. So I was surprised when I opened my mailboxes (postal and e-mail) and found that retailers I've patronized in recent years sent me birthday gifts—or, to be precise, coupons for big discounts or free products of my choice.

I am a bit embarrassed to admit that these commercial overtures made their mark. My thrifty, practical-minded instincts told me I need no new clothes or accessories, and, on principle, I aim to avoid excesses in materialism and acquisitiveness. But, I figured, I can't keep wearing threadbare sweatpants all around town on weekends!

Besides, I really like how those businesses treat me. So I found myself planning a visit or two to "my" friendly stores despite my hectic schedule. Why not make time for them (and me!) around a grocery run and kid's soccer practice this weekend?

Do I sound like a loyal customer to you? If you've read a lot of Baldrige Program materials, you probably know where this is going next—to the Criteria for Performance Excellence, particularly to category 3, which focuses on customers, and, for further detail, to item 3.2, Customer Engagement.

In Criteria terms, the practice of remembering a customer's birthday might be part of an organization's approach to engaging customers to ensure its long-term marketplace success. In order to build customer relationships, organizations using the Criteria consider the following:

How do you market, build, and manage relationships with customers to achieve the following?

• acquire customers and build market share

• retain customers, meet their requirements, and exceed their expectations in each stage of the customer life cycle

• increase their engagement with you

The Criteria note that “customer engagement” refers to your customers’ investment in your brand and product offerings and that characteristics of engagement include customer retention and loyalty, customers’ willingness to make an effort to do business—and increase their business—with your organization, and customers’ willingness to actively advocate for and recommend your brand and product offerings.

While I cannot name in this blog post the organizations that, in effect, celebrated my birthday (agency policy prevents such endorsements), I would not be surprised if other customers who are treated similarly are actively recommending those businesses to their friends. And when off-duty, I too wouldn't hesitate to praise them by name. After all, we have a solid relationship.

Baldrige Excellence Framework (Criteria)

About the author

Picture of Christine Schaefer

Christine Schaefer

Christine Schaefer is a longtime staff member of the Baldrige Performance Excellence Program (BPEP). Her work has focused on producing BPEP publications and communications. She also has been highly involved in the Baldrige Award process, Baldrige examiner training, and other offerings of the program.

She is a Phi Beta Kappa graduate of the University of Virginia, where she was an Echols Scholar and a double major, receiving highest distinction for her thesis in the interdisciplinary Political & Social Thought Program. She also has a master's degree from Georgetown University, where her studies and thesis focused on social and public policy issues. 

When not working, she sits in traffic in one of the most congested regions of the country, receives consolation from her rescued beagles, writes poetry, practices hot yoga, and tries to cultivate a foundation for three kids to direct their own lifelong learning (and to PLEASE STOP YELLING at each other—after all, we'll never end wars if we can't even make peace at home!).

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Comments

Jack Priggen on February 15, 2012 6:11 PM

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It's like Gene Simmons (KISS) said, "Ask the people what they want, listen, then give it to them." That's Cat 3 in a nutshell.

bill on February 15, 2012 6:38 PM

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Nice experience and certainly well written. If i may stir the pot a bit, i will suggest that you are not engaged with this supplier. Might i suggest that your warm feelings were bought by this supplier. I detect a glimmer of loyalty, enough to keep you with them given equal prices and value. You have not invested in this supplier, you have not shared your interself or your goals for the future of your relationship, you have not remained loyal while they charged you above market prices to recover payment for the 'special' service provided or in other ways tested your loyalty. I believe we both agree that the questions about engagement encourage companies to consider more than winning customers with price. We probably also agree that repeat buying is a limited measure of engagement.

christine.schaefer@nist.gov on February 17, 2012 12:13 AM | Replied to

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Good points! My retail industry example is certainly limited, and many aspects of relationship building with such consumers are not applicable to organizations’ B2B customers. As for the “glimmer of loyalty” you detect, Bill, additional information might convince you that I am in fact an engaged customer with at least one of the businesses. I have participated in surveys on the quality of shopping experiences and initiated communications to offer suggestions for additional products and enhanced product info. I have readily recommended the organization’s products to others (when not on duty, when endorsements are not allowed). And I have ignored competitors in favor of the businesses that have engaged me, possibly in spite of lower prices (who has time to check, especially when she readily finds what she likes at the places she usually patronizes?). While repeat buying may be a limited measure of engagement, how many businesses do not want to attract customers who frequently purchase their products? The fact is that I ended up spending more money than intended in retrieving a business’s b-day “gift” to me. (Despite my social conscience propelling me to consider that I could have done more good by donating every dollar I spent to a worthy charity, I do value my sleek new scuba-fabric, flare-leg slacks). So the store's customer-focused approach got me in the door, and my long-favorable perception of the value of the products helped persuade me to buy again. While this admission slightly embarrasses me, I'm sharing it for the sake of this discussion to benefit U.S. businesses. This, too, is an effort to meet the Baldrige Program’s mission to improve the performance of U.S. organizations through use of the Criteria for Performance Excellence, in which an organization’s customer focus is covered in category 3… I hope to continue the discussion (without the shopping example, if possible)!

Bill Schwagerman on February 22, 2012 9:28 PM

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I'd like to get a few questions answered if possible from anyone more familiar with Lean Six Sigma than I. I really appreciate the Baldrige criteria, believing in its value to manufacturing and other categories of business. In fact I just applied to be a state excellence examiner. Category 3 (Customer Focus) addresses how an organization would engage their customers, with a focus on listening to and supporting customers, determining their satisfaction, offering the right products, and buliding relationships that result in loyaly offerings (quoted from the Criteria for Performance Excellence 2011-2012). Questions: 1) Would the Lean Six Sigma tool "Customer Interviewing" such as noted in Wedgewoods book: Lean Sigma fall under Category 3 of Baldrige? In the book, it discusses this method to be the primary means to collect qualitative VOC information during a Lean Sigma project. Q2) Would a "Customer Requirement Tree" also be a good tool related to Category 3? Explain please Q3) How about customer surveys? I'd just like to get a little help understand ing if these three Lean Sigma tools are key to meeting the Category 3 requirements and if anyone out there has used any of these. Any help would be appreciated. Thank You!

Kay Kendall on February 28, 2012 2:53 PM

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1. Absolutely this would be a perfect example of one of the listening and learning tools described in a response to 3.1a(1). 2. I think this could be a great response in several places: 3.2a(1) in terms of how you determine customer requirements and design your products to meet them, but it would also be useful in responding to 6.2a(1) in terms of how you design your processes to meet customer requirements. This would be especially true for customer-facing processes. 3. Depending upon the nature of the survey, these would belong in 3.1a(1) as one of your listening methods or 3.1b for how you determine customer satisfaction and engagement. They might even address part of 3.2a(2) for how you determine your customers' key support requirements.

Bill Schwagerman on February 28, 2012 4:07 PM

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Kay, thank you for pointing out 6.2a(1) in the Baldrige Criteria. And how we approach our processes leads to the wonderful world of Lean Enterprise, Six Sigma, ISO, and the PDCA methodology. All things our company is engaged in. We have started to use the A3 thinking method. Anyone out there have any advise or opinions on A3?

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