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August 2003

Are You Hugging Your 'Customers'?

Don't worry, I'm not trying to set you up for a harassment charge. The “hugs” I'm talking about are behaviors aimed at earning the respect, trust and loyalty of your particular customer base.

We all have customers because we're all selling something — whether you lead a pharmaceutical product team, provide human resources or IT services to corporate colleagues, run a financial services practice or sell advertising — we all have customers (or clients, or stakeholders) — people whom we serve or who “buy” our products or receive our deliverables.

The question is: what do your customers think of you? Would they eagerly recommend you or your organization to others? Are you creating such a positive experience of working with them that if they had a choice, they would not hesitate to work with or be served by you?

In the book The Experience Economy, Joseph Pine and James Gilmore argue that the service economy, which emerged over the past 30 years as the dominant engine of economic activity, is about to be superceded with something even more esoteric than services ever were: experiences. Starbucks, for example, serves up more than a cup of coffee; they provide a quality product and polite service in a stylish and soothing atmosphere. They differentiated their product offering with an exceptional experience and, in the process, revolutionized their niche in the food service industry.

How do you generate such an experience? First, you make your customers and stakeholders your numero uno focus. You live by good ol' fashioned values like the Golden Rule and “the customer is always right.” The key is to move beyond a bottom-line perspective and show your customers that they represent more than a promotional or profit-making opportunity.

Next, ask yourself: do you really know who your customers are and what they expect? Wal-Mart and Home Depot are prime examples of companies who figured out how to effectively serve the middle-market shopper, just as Ritz-Carlton and Nordstrom's refined the formula for delivering stellar service to an upscale crowd. Whether your “key client” is your boss or consumers at large, you must determine what they want and reach to exceed their expectations.

Foremost, you must cultivate a trusting and caring relationship with your customers. This conveys that they are part of your valued personal network. One company we know has a “Chief Spoiling Officer” whose primary job is to ask clients: “How can we spoil you?” Hans Williman, a veteran general manager with the Four Seasons Hotel, once noticed the discomfort of the only man at an exclusive fundraising function not garbed in a tuxedo. Within minutes, Williman located a tux — plus a tailor for on-the-spot alterations — and thus gained a lifetime customer and significant source of referral business.

There are solid business reasons behind the importance of hugs. According to Frederick F. Reichhel and Thomas Teal, authors of The Loyalty Effect, U.S. corporations lose, on average, half their customers in five years, half their employees in four, and half their investors in less than one. “Hugs” are a means to stem that tide, build long-lasting business relationships and keep producing superior results.

by Jack Mitchell

I have shopped at Mitchell's, a family-owned retail clothing business in Westport, Connecticut, for over 20 years. On each visit I feel as if I am being welcomed back at a family reunion. This is no accident. Mitchell's has built its reputation around managing customer relationships with over-the-top personal service. They've served three generations of CEOs, including Jack Welch, yet the secret of their success relies on treating every customer like a CEO.

Jack Mitchell (son of the founder, Ed) has written a gem of a book that describes how to create a customer-centric organization. Mitchell explains that “hugging” means going the extra mile to delight a customer. His stories exemplify the dedication and responsiveness required to inspire customer loyalty. His management philosophy recognizes that “a relationship is at the heart of every transaction” — a concept that speaks to virtually any kind of business. And to learn how high you or your organization rates on the Mitchell's scale, just pick up the book to take the Hugging Achievement Test (H.A.T.)!

Actions for Results: Tips & Tools for Hugging Your 'Customers'

As Jack Mitchell notes: “Hugging is a mindset…a way of getting close to your customers and truly understanding them.” To that end, consider these action steps:

• Measure your hugging success. Solicit feedback. Learn why customers like working with you — and what turns them off.
• Develop a hugging strategy. Gather your team to identify specific ways and make action plans to hug customers better.
• Treat employees like customers. Find out what your employees want and expect. Do what it takes to make them feel special. Their loyalty counts.

Be prepared — at EquiPro, we believe in giving our clients hugs, too!

Lynda McDermott

Lynda is honored to be one of over 570
Certified Speaking Professionals
in the United States

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