Why Should I Do Business with You?
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A few months ago, I attended an invitation-only conference for retail bankers organized by Tom Brown, one of the most thoughtful hedge-fund managers I’ve met. It was in a cheerful setting, but the mood was somber. Most of the talk emphasized how brutally competitive the business had become. The complaints were familiar to executives in all sorts of industries: The Internet was wreaking havoc with profit margins; mergers and acquisitions were creating a handful of giants; customers had become tough, demanding, fickle.
It was enough to make me, as an outsider, feel sorry for the group—until one industry expert explained the real source of the bankers’ problems. This consultant, whose firm has conducted thousands of “mystery shops” and interviews with front-line employees at retail banks, told the gathering that during their visits, his researchers always ask bank employees a simple question: “As a customer, why should I choose your bank over the competition?” And two-thirds of the time, he said, front-line employees have no answer to that question—they simply “make something up on the fly.”
How can any business expect to outperform the competition when its own employees can’t explain—simply and convincingly— what makes them different from the competition? This question isn’t just for bankers. Gary Hamel, the influential strategy guru at the London Business School, makes the case that most companies, in most industries, suffer from a kind of tunnel vision: They chase the same opportunities that everyone else chases; they miss the same opportunities that everyone else misses.
That’s why I call this blog “Game Changer.” It’s the companies and leaders that change the game that win big. Over the last few months, when I think back to that conference, I think about the companies I’ve gotten to know that are charting a one-of-a-kind course in copycat industries. There’s fast-growing Umpqua Bank in the Pacific Northwest, which has reimagined its branches as community centers—and breathed new life into them as a result. There’s the miraculous London Drugs, a pharmacy chain in western Canada whose stores sell everything from prescription medicines to high-end furniture to marriage licenses—an eclectic mix that generates more sales-per-square-foot than Wal-Mart.
So ask yourself, as you think about the future of your company, and your career for that matter: What do you see that others don’t see? What ideas are you fighting for? Or, if you’re in the mood to be brutally honest, ask yourself these questions: If your company went out of business tomorrow, would anybody really miss it and why?
All those bank employees couldn’t answer any of those questions very convincingly. Could you or your employees? And if not, why do you think you or your company are going to win?
Read all of Bill Taylor's Game Changer posts
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William C. Taylor is an agenda-setting writer, speaker, and entrepreneur. His new project, Practically Radical, chronicles the radical shifts transforming business and the practical steps that will determine who wins. His most recent book,Mavericks at Work, has been a New York Times, Wall Street Journal, and BusinessWeek bestseller. As cofounder of Fast Company, he launched a magazine that earned a passionate following around the world. He is an adjunct lecturer at Babson College and a former associate editor of Harvard Business Review.
Comments
Why should I choose your company over another? I hope managers resist the temptation to teach employees to parrot some made-up spiel when the interact with customers.
Certainly, employees should be aware of why their company is the preferred choice among all the competitors--if it is. The easiest way to get them to explain this naturally and authentically is (a) to make sure the company delivers top-notch products and services and (b) to make sure that the company is a great place to work.
Ask anyone employed by Southwest Airlines whether she or he likes working there. You'll get a genuine, sometimes enthusiastic affirmative response. Take a trip on Southwest and you'll notice the difference yourself. (Same with Jet Blue, although the bubbly behavior of the front-line employees sometimes appears a bit over the top.)
Few who are miserable in their job will recommend their company to customers, either through their performance or their words.
Mike Palmer
Ethics By Design
- Posted by Michael Palmer
October 2, 2007 10:42 PM
I think the questions included at the end of the post are vital--all companies should hang them in their conference rooms, etc. They also tie into one of your earlier posts about Marc Andreessen asking employees early into one of his start-ups, "What are the 10 reasons why this company is going to go out of business?"
Very interesting
- Posted by eric
October 3, 2007 11:06 AM
First and foremost, I think all employees need to ask themselves why they work for a certain company. This might even be a question human resource can ask a prospective employee. Companies that are always changing and figuring out what works can remain competitive by looking ahead.
I agree with Mr. Palmer, those employees that are miserable in their jobs will most likely let all of their closest friends and family know how they feel. "Few who are miserable in their job will recommend their company to customers, either through their performance or their words." Family and closest friends can be some of a companies greatest advertisements.
- Posted by Tina C
October 8, 2007 2:03 PM
When I coach executives I ask: What's the fine-point purpose of your company? It's amazing to see that many VP's don't know the answer; some give me vague answers: To make money. Wow, that'll catch the attention of prospects.
- Posted by Dee Dukehart
October 8, 2007 2:19 PM
Any organization or company stands up on two basic things :
(i)Knowledge
(ii)Technology
the topic which we are here to discuss is the knowledge about the Company amongst its employees and its leader.
it is very important to understand in this competitive age what you are competing for?
All of us dream with the ideas to be a part of a Fortune 500 Company without pertaining to know why.
This TOPIC was a very interesting one indeed and perhaps the PRIME one amongst the main strategies of business in todays age.
Pramit Guha
- Posted by Pramit Guha
October 8, 2007 2:28 PM
The ability to articulate how you personally and your organization overall makes a difference is also essential to public agencies.
On my first day as chief operating officer of a state agency the agency director revealed that the chairman of the legislative budget committee was intent on zeroing out the agency's appropriation in the upcoming budget. The chair didn't understand the benefit the public received funding the agency.
As it turned out, many of the agency's personnel were unable to articulate their or the agency's value proposition.
The organization was comprised of scientists and regulators internally focused on the nuances of their own projects. They had lost lost track of the need and the skills to communicate how their research and work benefited the public.
An agency wide initiative was launched to address this lapse. Each individual of the organization --from mail room clerk to executive-- was trained to articulate, in their own words and from their own perspective, how their job, program and the agency benefited the public interest.
A by-product of this effort was a series of minor reorganizations, more focused programs, inter-program collaboration, enhanced customer service and a transparency through which legislative leaders could clearly see that the agency was effectively and efficiently providing the essential public services.
As a secondary consequence, voters and the legislature turned to this agency to manage new programs.
- Posted by Brian Sway
October 8, 2007 2:56 PM
This is a perfect example of the services marketing chain. The thing that I have found most people forget is that it isn't just about hiring the right people, but about spending the time and money to train, develop, and communicate with them. This is the break-down where most good ideas go bad.
- Posted by Curt Baker - Consultant & MBA Student
October 8, 2007 3:04 PM
Why should I do business with you?
Terrific question!
If there is any answer at all, let me explain you that sometimes it may depend from the employer.If the employer encourages being a robot while we work as a sales agent(for example) or the employer thinks that to buy or sell doesn't matter too much.
The employer may say to himself, being creative while selling is great but there may be a big risk. How to compete without reducing our inventory to a dangerous level?
Selling becomes the way to increase our revenues at the same time that we increase our stock of merchandise in order to sell more,more,and more...
I would choose your company to do business with me for several reasons.
One, feel good while being there.Two, good relationships with employees and supervisors,as well as managers, etc.
Three, stimulus and bonds for the more outstanding performances from employees should not be ignored.
Finally, if I can be myself in that job that's what some employees, like me,may be looking for, the opposite can be a huge problem, being someone without direction is imposible to succeed.
Julio R Gonzalez Jr.
- Posted by Julio R. Gonzalez Jr.
October 8, 2007 3:26 PM
As an entrepreneur of middle age...lotsa failures(trusting those who had ulterior, unspoken, personal agendas)...some successes, on a small scale...What I've discovered, and continue too, is if I'm willing to share my knowledge, ideas, dreams with others...I have to complete the process...once I start...never give up...that is, until their desire is less than mine...so, look deep within yourself...ask, "How much do I want to share me?" I will tell you this much...Take time to read, study...people, those closest and not so...Be slow to speak, look them directly in-the-eye...smile...lean back in your chair...fold your hands...squint...then, wait for a response of some type...If he or she acts interested...you've most likely got someone who can visualize your intentions...now, share at least one small part of your dream...To do what is right and just and fair...absolutely
- Posted by Miles Weaver
October 8, 2007 4:34 PM
Hi,
This was a very nice article and an eye opener.I do agree with Curt Baker's point of view.
I think majority of the Sr. and Executive management do know about the vision and the strategy of their companies and why should customer do business with their companies.It is about the failure to communicate the execution of their strategies and ideas at the bottom level manager and the front line people which causes the breakdown
Divya Shah
Associate Consultant
- Posted by Divya Shah
October 9, 2007 12:30 AM
In an increasingly materialistic world with dwindling values, I think one can be a standout company by practicing 'real ethics'(as against promised lip service). If one can interact with potential consumers or business associates the way one would-on the ethical front- with one's nears and dears, then one can really create a large mindspace and brand value for the organization.
This could reflect in service courtesies, complaint resolution and deliveries among others. While this may be easier to achieve in smaller firms where direct supervision is feasible, in larger organizations this will present a challenge especially when some of the key functions are outsourced (especially true in sectors like banking and telecom).
Vigyan Verma
- Posted by Vigyan Verma
October 9, 2007 2:31 AM
Future will be governed by those who have vision.
One who can marshal the future uncertainties will do business with similar understanding.
- Posted by Rajesh Kalla
October 9, 2007 3:25 AM
In as much as i hope managers don't teach front line staff what to tell customers, i will very much appreciate it if they will explain to their front line staff what it takes to exceed customer expectations especially Ghanaian banks.
- Posted by George Acheampong
October 9, 2007 9:22 AM
Shared Perceptions of the Business of the Organization and the importance of the customer, should be the business of all employees
The knowledge of an organization’s product, service or brand, and the quality of the service, especially from those working in customer-facing positions, is critical in determining market success and the financial health of the organization.
Front line positions are among the most demanding jobs in the service industry. Employees in these jobs are expected to be fast and efficient in executing the mission and vision of the organization, as well as be courteous and helpful in dealing with stakeholders. From a customer’s perspective, proper representation from customer service staff reflects the most important aspects of service. The strength of service levels and the way service is delivered by frontline staff can definitely be an important source of differentiation as well as competitive activities, and in some cases becomes a catalyst of customer loyalty.
All employees’ knowledge of the company’s product is a major reason for the customer and firm’s competitive positioning.
It is also important to note the conflicts employees are confronted with daily, whether they should follow the company’s rules or satisfy customer demands. In numerous instances employees have to deal with conflicting customer needs and requests, as well as organizational rules, procedures and productivity requirements.
From my observation when traveling to several countries, what makes outstanding customer service performances so special is that often it is the things that cannot be taught. It is obvious that it’s the qualities that people bring with them to the organization. The Human Resource recruiter’s hiring decision should be based on the behaviour of the applicant observed and not on the words they hear, as in most instances the fast-talkers are the non-producers.
Finally, interviews should be structured around the job requirements and two or three weeks of training on the organization’s culture, vision and mission and the business of the company and the stakeholders.
- Posted by Neville Swaby
October 9, 2007 6:44 PM
I beleive the thought will invoke the managers to create a unique selling proposition, a niche and a service diffrentiator. They will strive to be instep ahead in innovation on service / product delivery front.
That is where the success lies.
Inspiring thought process.
- Posted by Amit Bajaj
October 10, 2007 8:26 AM
Excellent Subject!!
This topic is of real importance for an organization while deciding on future strategy. The true highlight and a takeaway from this theme is “apart from the importance of technology, skills and processes it is important to clearly define an internal communication strategy for an organization, so that there every individual within an organization is aware of the directions, the value that the organization provides to its stakeholders ( including customers).
Today with the advent of web 2.0, a lot of organizations have started to use web 2.0 internally within an organization with the intent of
1. Encouraging healthy discussion and interactions alongside guided themes with the intent of articulating value and addressing queries.
2. Channelizing creative ideas (alongside defined themes) within an organization so that they can be implemented for Organizational growth.
3. Identifying employee concerns / issues which can then be addressed.
And in doing so they also build the sense of belongingness at the grassroots’
- Posted by Sarvottam Sawaikar
October 11, 2007 5:55 AM
The theme' Why should I do business with you? ' is open item.
It sounded as if we can live without each other.
To certain extent probably since globalisation.
Well it is like picking a friend or being your friend, duty of care and being diplomatic where people start to tie-up for a deal.
Value chain approaches.
Constant review of maintaining friendly and business relationship.
Best Regards,
Alan Goh
Chartered Management Accountant, UK
- Posted by Alan Goh
October 11, 2007 11:02 PM
The front line employee has the duty of focusing on the details more than on the big picture, and by reason of his position he must lose corporate awareness, to give the customer his full attention.
As one's function is more central to the company (i.e. it combines more vital relationships), there is greater awareness of the corporate self image and its context.
The employee is then in a position to formulate the company's competitive argument, yet in a language that is more found "in house".
The same argument holds for the technical intensity of a specialist/expert, who by reason of his focus, must leave aside corporate awareness, and concentrate on a particular technical matter.
As one's task completion is more vital to the company's activity and performance (he resolves the local problem), there is less awareness of the other factors.
Not being able to promote the company can therefore be a sign of dedication and excellency in a particular area, which effectively teach different languages to different people within the company.
One must question whether if we are talking about an incapacity to formulate, or a different way to formulate (which reflect the peculiar relationships and routines).
It might be destructive to promote one "seemless" corporate language to the point where it destroys the synergy that is created by the variety and specialisation of its parts.
- Posted by Micka
October 12, 2007 11:57 AM
Why should I do business with you?
The answer should be because we help you to get the job you want done better than the competitors. However, this lack of an elevator pitch isn't restricted to just line employees.
When working for one of the world's largest HR and Financial Services consulting firms we put the senior exec team through media training. The trainer started with the simple question, so what do you do here at.........?
Sadly he received ten different answers from the ten different execs, including the CEO!
Why should I do business with you, Hopefully because I know what we do! Sadly, most employees have little idea as to what the company does, let alone the value that this offers their customers
- Posted by Michael Johnson
October 22, 2007 3:22 AM
Why Should I do business with you?
When several employees aren’t able to answer this question to any customer, they are demonstrating the poor leaders they got. Employees are a reflection of there leaders.
Although competition has been growing, we still found several business that get good financial results. They could be getting excellent financial results if top managers were able to show enthusiasm so that employees could get hooked to business, but sometimes it seems that been a leader is not an easy ability to develop.
Many leaders are far away for understanding that one of the main key for better performance is letting their employees participate in daily decision making in order to grow all, customer - employee - investors.
As a consultant, it’s a tough job trying to convince top managers the benefits of well involve employees in business matters, such as which direction they should be rowing. When this happens, I also question my self as a supplier, Why Should I do business with you?
- Posted by Pablo Stransky (Mexico)
October 29, 2007 2:09 PM
How important front line employees?
What they communicate or fail to communicate is being taken as the views of the organisation.
When they dont give a convincing answer, the customer tend to treat that as the official view of the organisation.
Just like a single individual all the employees of an organisation should be made well aware of the core-competency of the organisation, and should be made vocal with every customer who wants to know why he should do business with our organisation/
The customer see the organisation itself in the front office staff,
- Posted by P..A.Habeeb Rahiman
November 3, 2007 5:57 AM
Business in modern day is much more than a routine transaction. Leaders of any industry do have a vision, how effectively this is communicated to the work level who interact with customers is what determines success.
Tend to agree with all those in this discussion who brought out lack of effective communication as a prime reason.
Though success of obtaining a business is dependent on various other reasons, effective means of communication and bonding with the customer and ofcourse best efforts without sacrificing core business values, go a long way in determining success.
How many leaders today, instead of talking about objectives or reorganising, think about this aspect and how many are looking at the process implementation ? Every time a leader changes the core processes of business change.
- Posted by Madhav
November 23, 2007 12:49 AM
Why Should I Do Business with You?
Type of occasions arises when two mis-match people meet and try to
convience eachother. Situations I have come across at Malls/Supermarkets, retail banking( when customer visit bank for routine bankingwork,agents,bankrepresentative tries to market various produsts such as Insurance policy,credit/debit cards,home-loans,article loans,vehicle-loans etc,. Internet and TV advetisements while surfing,-great nuisences.
kmdesai.
- Posted by kmdesai
December 28, 2007 8:36 AM
This is a tought provoking question, ability to resolve and re
spond to the poser largely determines successes in businesses. Front line officers must know why customers would prefer them to competitions. Its about being customer centric, everything must start, revolve arond the customer and end with the customer.
Ultimately, a win-win situation is created for all stake holders.
i enjoy you!!!!!!
Lanre Iyanda (Nigeria)
- Posted by Lanre Iyanda
March 17, 2008 7:19 PM
Why do I do business with you?
Not so many employees even know the organisation's goals perfectly. Even when they work hard, managers some times fail to explain the mapping between their efforts and organization's goals. It's a good point being made that demands for clarity and transperency in an Organization to stand competition.
Bhanu Prakash.k
- Posted by bhanu
April 14, 2008 6:19 AM