Tuesday, April 12, 2011

Week 5 - Blog #4 - Types of Strategy

There are many different types of strategy that a company can employ to gain a competitive advantage. The reading "Types of Strategy: Which Fits Your Business?" reviews some of the different types of strategies that company may want to incorporate into its business. My current employer, a large financial services company, is very focused on developing long term customer relationships so that a mutually beneficial partnership can be forged.

Creating a personal relationship with a customer can lead to loyalty and repeat future business. Having happy customers will enable companies to create a steady and/or growing revenue stream. A happy customer will come back for more business and be more inclined to refer a company to others.

When focusing on cultivating the customer relationship it is important to note that the relationship will be more effective if some or all of the following are accomplished: 1) simplifying customers' lives or work 2) there are ongoing benefits for the customer 3) the customer receives personalized service 4) customized solutions are provided to the customer 5) a personal contact is provided for the customer so that they can easily communicate with somebody at the company 6) if the company continuously learns about the needs of its customers.(Types of Strategy: Which Fits Your Business?)

The company that I work for if focused on forging customer relationships. "Customer Focus" is one of our core values. My line of business is set up to serve the customer as best as possible. The relationship begins with a dedicated relationship manager and client service team that is focused on serving and knowing the client. The support teams such as trade processing,accounting, finance, etc.. that funnel up to the relationship manager and client service team are also set up for specific clients. This structure enables this line of business to understand its customers better, easily communicate with them, provide custom solutions that the customer needs, develop personal relationships, and puts itself in better position to simplify the end users' work lives while providing ongoing benefits.

It is apparent that this strategy is working for this organization. Over the past ten years global and domestic publications have ranked this organization #1 in overall customer satisfaction. The information gathered to get these rankings comes from the publications themselves by reaching out to clients, brokers, investment managers, and competitors. This well rounded feedback is one point of verification that this strategy is working. Also, this organization went through a huge merger in 2007. During this merger, it was thought that the organization would lose its customer focus and that its competitors would be able to grab dissatisfied clients. During the merger transition not one client left and more clients were added. This is another point of validation that the customer relationship strategy was working for this organization. One last point to note that the customer relationship strategy was working for this organization is that during the "Great Recession" when financial institutions were shutting down and losing customers this organization maintained a strong balance sheet and was able to increase customer satisfaction. By being able to increase customer satisfaction this organization became beacon of safety for new clients to join and forge new customer relationships.

Developing customer relationships may not be the end all be all strategy for other organizations or any organization, period. However, for this example, having strong customer relationships have enable this organization to maintain stability and growth through thick and thin times.

What strategy, or strategies, would have helped your organization perform better during the "Great Recession" and its following recover?

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