Build customer loyalty, with(out) pretending that there is a relationship between customers and the organization

Build customer loyalty, with pretending that there is a relationship between customers and the organization

Delivering good products and services has long been thought to create loyal, repurchasing customers.

Adding a loyalty program or two and customers should be even more satisfied, right?


Products and services are merely the basis of commercial exchange.

For organisations to build valuable, long lasting relationships with their customers they should enable two-way, mutual interactions.

Livework has collaborated with the Delft University of Technology and SiR – a research partner on service integrated relationships – to develop a framework and tooling to design for relationships

Build customer loyalty, without pretending that there is a relationship between customers and the organization

Paper: Distinguishing between service relationships and encounters.

Abstract: In 3 separate studies, the authors developed measures of different social mechanisms used in the interaction between a customer and a service provider and examined their effects. Service relationships occur when a customer has repeated contact with the same provider. Service encounters occur when the customer interacts with a different provider each time. Service pseudorelationships are a particular kind of encounter in which a customer interacts with a different provider each time, but within a single company. The 3 studies showed consistently that customers having a service relationship with a specific provider had more service interactions and were more satisfied than those who did not have one. These results held across 7 different service areas, 3 diverse samples, and 2 different ways of measuring a service relationship. (PsycINFO Database Record (c) 2016 APA, all rights reserved

Book: The Brave New Service Strategy: Aligning Customer Relationships, Market Strategies, and Business Structures Hardcover – March 7, 2000

The Brave New Service Strategy, delves into the evolution of service delivery and identifies three ways to forge links with customers:
the relationship
– where the customer personally knows the service provider and expects to interact with the same person again and again;
the encounter
– where the customer may know the organization but receives the service from whoever is available;
and the pseudo-relationship
– service delivered in an encounter structure but made to feel like a relationship.

From the Amazon reviews

With the Industrial Revolution, and the current changes happening with the advent of the Information Age, the interactions between companies and customers has become progressively less personal. Today, customers do not have a long-standing relationship with the people they purchase goods and services from. Instead of relationships, customers now have “encounters” with businesses and services. Many companies, however, still say that they are trying to build relationships with customers. This, say the authors, is a flawed strategy. Customers know the difference between a relationship and an encounter, and they are not fooled by the organizations attempts to convince them that they are in a relationship.

It is possible to build customer loyalty, without pretending that there is a relationship between customers and the organization, say the authors. The better strategy, is to build on the strengths of encounters (speed, convenience, low-cost service, familiarity and uniformity) rather than attempting to build a pseudo-relationship that the customer will know is inauthentic. The goal is to create “enhanced encounters” not “pseudo-relationships.”

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Enhanced encounters emphasize five essential qualities:

1. Trust: In enhanced encounters trust is built by repeated positive service.

2. Convenience: The service should be available for the maximum number of hours with the minimum amount of waiting.

3. Customized, not Personalized: As many choices as possible should be open to the customer, without impeding efficiency of service.

4. Uniform but Unique: Whenever possible, the encounter should establish a theme with wide appeal to customers.

5. Quality: Emphasize quality whenever possible.

April 22, 2000

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