Chapter 9: Better Linking to Customers

Overview

Few areas of business have brought science and practice together as extensively as has the realm of customer behavior. What drives customers’ initial purchases? What instills loyalty? How can a company’s relationship with current customers be expanded to achieve a larger “share of wallet”? These are value-focused questions that businesses have learned to answer through the use of facts and systematic analysis.

Two approaches help explain customer behavior. The first begins with knowing who the customers are: the kinds of people they are, where they come from, and what interests them. The second approach focuses on how goods and services are provided. Here the emphasis is on things such as having efficient sales and support systems and designing a process to ensure glitch-free and pleasing customer interactions.

The depth of analysis of the who and how questions with regard to customers almost always exceeds the depth of analysis given to the who and how of human capital. What attributes of the workforce—for example, general experience, interpersonal skills, technical depth—are most valued by customers? How can a company best manage its workforce to optimize customer satisfaction, loyalty, and spending? Careful analysis that establishes the links between customer outcomes and a company’s human capital attributes and practices is the way to answer these questions. The facts that result become the guideposts for managing the workforce strategically to achieve the desired customer outcomes.

This chapter examines successful customer relationships from the perspective of the three principles of human capital management: systems, facts, and value. We begin with a brief look at the process of understanding who customers are. That sets the stage for an examination of the linkages between human capital and customer outcomes.