Saturday, April 10, 2010

Fear of the Customer - the Worst Feeling in Business

Increased instability and uncertainty often lead to fear. The prevalence of fear today has prompted me to focus on that emotion for my next two blog posts. While fear can motivate positive change and action, decisions motivated by fear are typically shortsighted and suboptimal.

Today, I'm going to talk about corporate fear, and my next post will talk about using fear as a marketing motivation.

Any executive with experience has been there--a meeting with a dissatisfied client, a confrontation with a business partner, or a meeting to discuss what to do with a failed initiative. Fear is a common emotion in any of these situations.

How can we avoid fear and what should we do with the fear we feel?

Fear of the Customer

I learned early in my career as a product manager that things were never good if I was afraid of my customer. There have, unfortunately, been times when I was afraid to reach out to my customers. Why? There were typically two reasons:
  1. I was aware of the pain a product or service was causing for customers and didn't know how we were going to address that pain, or
  2. I knew that the organization I was working for didn't have the will or resources to address the customers' needs.
Under either of these scenarios, talking with a customer feels a lot like going into battle without a weapon or even protective gear. You know exactly what the danger is in walking out to meet your customer and can only rely on their mercy and benevolence for your survival.

Typically, companies fear their customers when promises are not kept, expectations are not met, or policies are unfair. In short, fear is typically the result of a company falling down on their side of the value exchange with their customers.

Signs of Fear

The following are 10 signs to consider to see if your company is afraid of its customers:
  1. You focus on retention through policies and procedures that make it difficult for your customers to sever their relationship with your company.
  2. You don't provide any clear method for providing feedback on your products and services.
  3. You have problems with refunds and chargebacks or set policies or hire staff to fight these "return" transactions.
  4. You hide or do not publish your company's contact information.
  5. You obscure your company's identity with DBAs and multiple brands.
  6. Websites, groups, and clubs form to express dissatisfaction with your company or products
  7. You suddenly feel a need to censor and moderate forums or message boards designed for customers to provide feedback.
  8. You decide you don't like your over-demanding customers and decide to focus on a new target customer.
  9. You refer to your customers using derogatory terms, such as idiots, morons, etc.
  10. You primary focus on your customers is in terms of revenue and transactions rather than how you can serve or satisfy their needs.
The Way Out

If you are in this position, the only way out is to decide how you are going to delight your current customers. The solution is NOT to find "better" customers or even "more" customers. The only way to get past your fear is to take care of the customers (or clients, partners, etc.) you already have. Once you are doing your best at keeping up with your end of the value exchange and communicating what you are doing, confidence will replace your fear.

1. Assess the situation
The first step is to learn how your customers feel about your company and products. Don't try to allay fears or address unmet expectations at this point. Instead, do everything you can to understand how customers view your company, products, and policies. Don't just ask "what" they like or don't like but "why" they like or don't like those aspects of your company.

2. Weigh the options
Once you understand where how your customers feel, you can now make decisions about what you are going to do to address the needs of your customers and overcome your fears in the process. Now is the time to weigh your options and discuss possible changes and their associated costs and benefits.

3. Make a plan
The third step is to create a plan and time line. You will want to show evidence that you care about your customers and that your efforts are genuine and consistent over time. The plan should build momentum by moving from low-hanging fruit (the stuff you can "get out there" tomorrow) to the more difficult changes that are necessary.

4. Execute on the plan and communicate progress
The fourth step is communicating as things happen. Communicating before you have a strategy and plan only makes the situation worse. Don't apologize to your customers without also telling them what you are doing to make things better. When communicating, don't make promises that you can't keep. The best way to communicate is again by maintaining momentum by communicating improvements after they are made.

This isn't the time to pre-announce changes or set a time line. You're building confidence and removing your fear in the process. This isn't a time to increase your risk of failure by communicating specific tasks and deadlines--unless your customer relationships are so poor that your situation has become desperate and this style of communication is the only way to regain customers' confidence.


These steps will help you at times you become afraid of your customers, clients, investors, or partners. When fear creeps into your relationships, identify the fear and rectify the situation as quickly as possible.

Remember that fear of your customer (or any other business associate) turns your relationship from one of mutual benefit to one that is adversarial in nature. If you are fighting with your customers over time, your business has no hope for success.

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