Twenty years ago, emotional intelligence (EQ) entered the lexicon of business leaders and became the focus of how leaders needed to lead and how businesses needed to relate to their customers. Organizations such as Starbucks and Zappos emerged as monuments of this new and powerful approach to doing business.
More recently, as presented in an article titled "Unlock the Mysteries of Your Customer Relationships," published in the Harvard Business Review, the authors proposed that success in today's business environment requires going beyond EQ and the formation of a singular relationship with your customer. Instead, it necessitates understanding the type of relationship customers (members) want and then delivering on it in spades. The authors go on to write that certain customer relationships are inherent to certain brands, that certain customer relationships offer more value than others and that unless business owners understand what these high-value relationships are, they will be left in the wake of those organizations that do get it.
Over the past several years, the club industry has espoused the importance of fostering relationships with members, and by doing so, club operators can enhance their club's level of member loyalty and membership retention. The industry's mantra of fostering relationships has been embraced by many club operators while being ignored by others. Yet those who have embraced the message of fostering member relationships have done so without truly understanding if the relationships being fostered are the right ones or ones that will bring the greatest value to their business. Herein lies the value of this new form of intelligence: relationship intelligence.
In the article, the authors discuss how every relationship has rules and regulations that are governed by the customer's expectations for the relationship. The authors point out that business operators need to become adept at identifying the relationships that their customers expect, then leverage those that have the greatest value to the business. In the article, they detail several customer relationships, four of which we have found in clubs we have worked with.
Those four are:
1. Master/servant. In this relationship, memberd seek to intensify feelings of self-worth. The members demand that club management listen, anticipate their every need, satisfy every demand and not question their reasoning. A great example of this customer-relationship model from the hospitality industry would be Ritz Carlton, where guests expect to be treated as royalty. This type of relationship is more likely to exist in a club that is focused on delivering a luxury or high-end experience to an affluent and successful consumer base. Leveraging this type of relationship requires that management and employees have a servant's heart and considerable humility.
2. Best friends. In this relationship, members seek intimacy and emotional support and desire having a transparent and honest dialogue with the club. The members want to be assured that management is open and forthcoming with them, that they are appreciated and that management respects their wishes. Likewise, as with any friendship, those feelings of appreciation and respect need to be mutual. One company that has done an outstanding job at understanding and leveraging the best friends relationship with its customers is Harley-Davidson. People in the club business tend to believe that the best friends relationship is what every member wants, when in truth only a segment of members really desire this type of relationship.
3. Fling. In the fling relationship, members want to experiment with a new identity. This relationship requires the club to provide excitement and innovation that ignite members' passion with every moment of truth. Two companies from the retail world that leverage this type of relationship with their customers are Apple and Swatch. This type of relationship is more likely to exist in clubs that serve a young professional audience whose self-worth is heavily reliant on what they possess rather than who they are.
4. Basic exchange. In the final model, customers enter into a relationship to obtain a product or service at a fair price. The customers/members are searching for dependability and do not want to have to think or do much once the product is purchased. An example of this from the retail world is the relationship consumers expect when they purchase cable service, such as from Comcast or Time Warner. This type of relationship is likely to dominate in a club where customers are purchasing access and convenience for a value-oriented fee.
These are only four of the many relationships that customers/members seek. In any given club, one or more of these relationship dynamics can exist.
Because more than one relationship dynamic exists in each club, management must understand the types of relationship dynamics that exist in the club and which ones bring the greatest value to the club. Operators in the club industry, like in other hospitality and customer-facing businesses, need to take the time to explore the customer dynamics of their business, a process that goes beyond walking the floor and proclaiming, "We know our members." Relationship intelligence requires a disciplined process of discovery to gain insight into the various relationships that members desire and revealing which of these will bring your club the greatest bang for the buck.
Stephen Tharrett and Mark Williamson are the co-founders of ClubIntel, a brand and member/employee insights firm. Together, they have more than 50 years of experience in the club, hospitality and consumer insights business. They can be reached at [email protected], and [email protected].