When you first see this you must be thinking “Are they crazy, why on earth would I want to give business to my competitors?”
But this isn’t as daft as it sounds.
There are numerous reasons you might want to recommend a competitor and they are all about acting in the best interests of your customers. And by doing the right thing by them you will reap the rewards.
When companies act in this way it clearly demonstrates to your customers that they can trust you because you are willing to put their interests before your own. However, you need to ensure it is not seen as a gimmick, but it is a genuine, sincere and honest act of you trying to help your customers.
Building profitable long-term customer relationships and loyalty
It all boils down to trust and what the benefits are of being seen as a trustworthy partner. After all honesty, empathy and transparency are all qualities you would expect in a friend, so why shouldn’t you expect businesses to behave in the same fashion?
The real question to ask is why do so few companies actually act in this transparent and honest way?
Customers have long memories and will reward businesses for this type of altruistic behaviour and by doing this one simple act you will win their trust, because you are putting their needs before your own short-term financial interests. This is the stuff that builds profitable long-term customer relationships and loyalty, and it not new.
Miracle on 34th Street
Before I give you some current real life examples, I saw this illustrated particularly well in one of my favourite Christmas films Miracle on 34th Street. This film made in 1947, over 65 years ago, illustrates this point and is probably one of the first times that customer experience made it onto the big screen, although if it was called anything back then it was probably called customer service.
For those of you, who haven’t seen the film the story takes place between Thanksgiving Day and Christmas Day in New York City, and focuses on the impact of Macy’s department store Santa Claus, who says he is the real Santa.
While working in Macy’s he is told to push parents to buy their presents from the store, but he ignores these instructions.
Instead he tells one exhausted mother where she can get the toy her son wants because Macy’s has run out of stock and then proceeds to tell another mother that she should buy her daughter’s skates at Gimbels (Macys archrivals) because they are better made.
And when the women are surprised he is telling them to shop elsewhere and questions him as to why he is telling them this, Kris responds “The only important thing is to make the children happy. Who sells the toy doesn’t make any difference. Don’t you feel that way?”
And what do you think the customer’s reaction to this surprising advice was, well in the film the exhausted mother approaches the head of the Toy Department and says: “Listen. I want to congratulate you and Macy’s… on this wonderful new stunt you’re pulling. Imagine, sending people to other stores. I don’t get it. Imagine a big outfit like Macy’s… putting the spirit of Christmas ahead of the commercial. It’s wonderful. I’ve never done much shopping
here before… but from now on, I’m going to be a regular Macy customer.’
Then his secretary lets him know later that afternoon that there are six more women who want to thank him, and personally, she thinks it’s a wonderful idea, too.
Now I know it is only a film, but I have experienced and seen the reaction of customers when a company puts their interests before its own.
Here are just a few examples:
Demonstrating the value of your customer
Haven’t we all been into a store and when you can’t find what you are looking for, don’t you find it wonderful when the sales person advises you which other shops may have it. I mentioned to the shop assistant in Myer that I thought $22 for a cake tin was overpriced and she said to me on the quiet, “Try the $2 shop, I think they are much less there”. I was impressed, but would have been even more impressed if she hadn’t had to say it on the quiet.
Isn’t it great that Amazon always reminds you that you bought a book before, so you don’t accidentally buy it again? They do the right thing demonstrating that they value you by putting your financial interests before their profits. It also benefits Amazon’s bottom line too, as they don’t have to undertake a time and resource consuming returns process when you discover you already have the book.
I was visiting the Vodafone contact centre in the UK and they were running a campaign for their high value customer. They were proactively calling them to tell them they were on the wrong plan and how they could save money. And I heard numerous customers actually say: “Am I getting this right, you are calling me to tell me how I can pay you less? What’s the catch?” To which Vodafone replied, “No catch, we just want to look after your interests and want to keep you as a customer for a long time and we feel the best way to do this is to make sure you are on the right plan and not paying us for services you don’t need and aren’t using”.
As you can imagine customers were flabbergasted with this response and the campaign was so successful that it was rolled out across the whole customer base.
Imagine if your bank contacted you to tell you that they just launched a new type of account and advised you to switch your money into it so you would earn more interest, or your mobile provider calling you to tell you to switch to a cheaper plan. How likely would you be to trust them more, and stay loyal to them because they act like they have your back? Why would you go elsewhere? And how many friends, family and others on social media would you tell of their honourable behaviour? How many new customers might a business acquire because of acting this way?
If companies act in the customers’ best interests it consistently bring rewards to them in the medium to long term and will always dwarf any short-term profits that may be made by acting in a self-interested way.
Placing public service ahead of profits
And on that note I think I will end this article with Mr. Macy’s response to Kris’s actions:
“I admit this policy sounds idiotic and impossible. Imagine Macy’s Santa Claus sending customers to Gimbels. But, gentlemen, you cannot argue with success. Look at this, telegrams, messages, telephone calls, the governor’s wife, the mayor’s wife… over 500 thankful parents…expressing undying gratitude to Macy’s. Never in my entire career… have I seen such a tremendous and immediate response…to a merchandising policy. And I’m positive if we expand our policy…we’ll expand our results as well.
Therefore, from now on…not only will our Santa Claus continue in this manner… but I want every salesperson in this store…to do precisely the same thing. If we haven’t got exactly what the customer wants…we’ll send him where he can get it. No high-pressuring and forcing a customer…to take something he doesn’t really want.
We’ll be known as the helpful store… the friendly store, the store with a heart… the store that places public service ahead of profits. And, consequently, we’ll make more profits than ever before.”
The business benefit this scene depicts is pretty farsighted for something written in 1947 and still universally true.
Amy Scott - Director, Sedulous
Amy Scott is a Director of Sedulous, a service design and customer experience consultancy that has worked for a variety of blue-chip global British, Australian, European and American organisations on how to improve their service and deliver better experiences to their customers.