Jeff Judy

Jeff's Thoughts - January 13, 2016

Everybody Knows What A Relationship Is, Right?

In several decades of training and consulting work in the financial services industry, I don't think I've ever met an institution that didn't talk about "relationships" with customers. At your place of work, I am sure the importance of "developing relationships" is mentioned regularly.

Indeed, many organizations even assign the title "Relationship Manager" to some credit staff.

But I have often noticed that in spite of all the messaging about relationships, there remains a question that many employees might have a hard time answering, namely:

"How do you measure a relationship?"

Make no mistake, relationships are measurable. After all, if management sets a goal of developing more or deeper or broader relationships, they need a way to decide if they are making progress toward that goal.

And there's the rub. There are several ways of defining relationships, with profound effects on employee behavior and customer interactions.

Some measure a relationship by the number of products and services the customer takes, the so-called "wallet share" approach. Others are more interested in how regularly employee-customer interactions take place. Still others value loyalty, and measure relationships by the length of time they have been in place.

All of these approaches are valid. Sometimes they are combined, although in that case it is important to set some priorities. I am not here to tell you how to evaluate your success in building customer relationships. As you would expect, different institutions choose different definitions of successful relationships.

The problem is not the differences between institutions. It is the differences within them.

If asked what makes a good relationship, how many of your employees would give the same answer as the management team? More simply, how many of them would give the same answer, period? What about members of the management team? Would they all give the same definition of a desirable relationship?

It isn't unusual, in my experience, to find that different units of the organization -- whether regions or branches, or different functions or levels -- value different aspects of relationships. Even within a branch, say, two different staff may approach relationships differently.

That makes it hard to reach management's goals, when different employees are pulling in different directions, so to speak.

And it raises havoc with valuable customer relationships. When customers need to interact with a different "relationship manager" than usual, whether on a temporary or a long-term basis, they may find the rules of the game suddenly changed. And that is anything but the path to customer loyalty.

It comes down to culture. In a tight, consistent culture, the management team shares common standards for relationship building, and does a good job of making sure those standards are understood and embraced throughout the organization. In a loose culture, there are multiple definitions of a valued relationship, and those differences waste time and squander customer good will.

By all means, your employees should work hard to build better relationships with customers. But to achieve optimal outcomes, they all need to share a clear and common understanding of what "better" means.