Social Business as Hospitality: Customers Relationships are the only Competitive Advantage

Posted on December 30, 2012. Filed under: Uncategorized |

Recently a number of activities have in one way or another highlighted this point:  the only real sustainable advantage we can have is based in the relationships we have with our customers.  This may be obvious to many, but it was an ‘ah ha’ moment for me, bringing together a number of concepts that I’ve been thinking about.  This blog is intended to pull together some of these ideas and explore where it leads.OLYMPUS DIGITAL CAMERA

First is the thought that customer relationships are a basis for competitive advantage.  I recall from my marketing and sales days that getting a new customer is much more difficult and expensive than keeping an existing customer.  No where is that more true than in a turbulent, high velocity ecosystem like we find today in just about every industry.  Keeping a customer is critical, and that means finding ways to constantly add value to the relationship we have with our customers.   Keeping customers must be a core competency of a business today, whether the enterprise is a B to B or B to C.  We can even extend this idea to non-profits and governments…keeping the equivalent of customers, donors and ‘the public’ engaged, connected and supporting the entity must be a core competency.

I heard a similar idea from Jim Stikeleather,  Chief Innovation Officer at Dell, who, in a recent presentation he gave to the Society of Information Management, said something like

“The only competitive advantage is the relationship you have with your customer and you should be willing to be whatever they need you to be to meet their needs.  That means you need to be able to reconfigure almost instantly so you can provide the products and services necessary to maintain that relationship.”

Keeping customers is not a new concept.  Marketing is built on finding ways to get and keep customers.  But thinking about customer relationships as competitive advantage, and perhaps the only competitive advantage, puts new emphasis on the activities necessary to preserve these relationships.

But what is new is the way companies can preserve these relationships today—they must re-configure themselves so they continually add value to the relationship.  A friend and colleague of mine, Dr. Nick Vitalari, has recently published a new book entitled ‘The Elastic Enterprise, in which he describes a new business model that wildly successful companies like Amazon.com, Ebay,  Facebook and more have used to get to the top of their field and stay there for so long.  They are elastic.  They can give and take as necessary to provide whatever their customers want.  They do that with a business platform that allows them to grow and contract as necessary and with an ecosystem of partners who provide expertise, innovation, and, well, partnership, to bring to the customer whatever they like.    Being an elastic enterprise is exactly what every company needs to be to continuously provide added value to existing customers.  It’s the way to evolve, grow, innovate and delight customers instantly.

But in between delighting customers with new products and services is the relationship-building activities necessary to know the customer and to know what to provide the customer.   It’s more than just knowing the demographics of the customer base.  It’s about connecting one-on-one with customers throughout the business cycle, throughout the value chain.  In short, it’s about what I believe is at the core of social business.

Social business to me is the infusion of social capabilities into business processes.  It’s about finding ways to engage, collaborate and innovate within the business processes of the enterprise. This is a new concept.  This is a new way to think about social, about business activities, and about how the very core of business is done.  We know about sales and marketing efforts and about using social capabilities for increased sales.  This is about building relationships at every opportunity of the business…operational processes, HR processes, innovation processes, financial and accounting processes, and more…just about every process in the business can be made more effective and be a point for relationship building and value add by infusing it with social capabilities.

Today we have tools that didn’t exist before: social media, social networks, social innovation platforms, blogs, micro-blogs/tweets, video-sharing, instant-photo-sharing, and so much more.  These social technologies (I like to call it “social IT”) provide a new, and increasingly critical way to collaborate, engage and innovate with customers (see my earlier blog about this).  Increasingly, social IT and the platforms they create are the primary way and, dare I say, the only way in some cases, to connect with customers.

Another friend, Marnina, a professional chef and hospitality industry guru, said something that crystallized the idea of building customer relationships and how that’s different from what most enterprises do with social media.  She described the difference in providing hospitality versus service.  Marnina said,

“Hospitality means treating customers like guests, where you get to know them and they get to know you.  It’s about a deep relationship.  Customer service is different than guest services.  Customer service is a helpdesk that answers questions.  It’s transactional.  Guest services is hospitality.”

We seek to provide something similar to hospitality where our customers feel special, and where they feel we care about them, and what their needs are.  So back to the original thesis of this blog: If customer relationship are the only source of lasting competitive advantage, then our enterprises must become competent in hospitality, in maintaining and growing those relationships.   Therefore we must invest in building social businesses and develop the competencies that enable us to have deep customer relationships.  That’s so very different than using social IT to sell and to market.  It’s more than just a transaction.  It’s at the heart of what I think will drive every enterprise to become a social business.


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