Paradigm shift

Technology changes the way everyone does business, and if a business owner is not trying to stay ahead of the technology curve, she will be buried by it. In the latter part of the last century, the telegraph industry experienced a “paradigm shift”—a discontinuity in the business-as-usual environment. The facsimile machine changed the telegraph industry, which had stood strong for more than 150 years. The Internet and e-mail helped pound the final nail in the coffin, and Western Union has since closed its telegraph service around the world.

Many devices that seem commonplace were not used as recently as 1980. Some examples are laser printers, automatic tellers, and cell phones. There were no DVDs, CDs, and almost no videocassette recorders, no video rental stores, and no one owned a personal computer. Commercial Internet would come years later so e-commerce was nonexistent.

The old paradigm involved a system of mass production and mass marketing. Today it is being replaced by a one-to-one economic system, which is characterized by customized production; individualized accommodation of customer needs and wants, and one-on-one personalized marketing. This shift is changing the rules of business, and unless business owners on Saipan understand the change, they will be left in the old paradigm world, wondering what happened to their business.

Competition is more for a share of the customer versus a share of the market. Businesses must compete for the loyalty of each customer one at a time if they want to remain in business for a long time. Jim Sterne, author of Customer Service on the Internet, states: “The customer and the business together are now redefining what it means to participate in a commercial relationship. It is becoming a collaborative, interactive world. The new dynamic of competition is based on doing battle for one customer at a time.”

To cope with this shift, a business should realize that its most indispensable asset is the customer it serves, and the relationship it enjoys with each customer. Technology can assist to develop and maintain that relationship in several ways. Broader bandwidth will allow full Internet integration by allowing customers to talk to a service rep while still connected to the Internet. Instead of static web pages, a customer can view videos on new products.

Some experts predict human-centric computers that will allow customers to communicate and interact naturally with machines. Media systems now allow business owners to go beyond simple merging of names and addresses to include specific information based on past buying information and personal preferences.

All of these technological advances allow you as a business owner to do one thing very well—serve the needs of the customer better. The current buzz phrase for this process is called customer relationship management (CRM). According to the Harvard Business Review: “CRM aligns business processes with customer strategies to build customer loyalty and increase profits over time.”

What’s interesting about that definition is that the word “software” and “technology” are completely missing. However, with the assistance of CRM technology you can more easily move toward one-to-one marketing that builds stronger relationships and better satisfies the needs of the customer.

Customers have come to expect good quality at reasonable prices; however, they don’t always expect great service. We can tell you that this type of service on Saipan is more difficult to spot than the brown tree snake. People have come to expect marginal service because that is what they usually get.

The technology paradigm shift will allow you to improve your operations, while the relationship paradigm shift is needed to improve your staff’s attitude toward the customer. Just understanding the long-term value of a customer can help people make a mental shift. Mark Grainer of the Technical Assistance Research Programs Institute estimates that a loyal supermarket customer is worth $3,800 per year. Over a buying lifetime, each customer is worth more than $150,000 in gross sales.

Looking at each customer in such a long-term fashion makes one think twice about doing something that would offend a customer and keep them from making a $5 purchase, because that $5 can translate into thousands of lost dollars in sales. And that does not even include all the people that the disgruntled person told and who never visited your business.

Whether you use the latest technology or just keep mental notes of the customer’s buying preferences, you must make the paradigm shift that will allow you to better serve the customer and eventually improve long-term sales.

(Rik is a business instructor at NMC and Janel is the owner of Positively Outrageous Results. They can be contacted at: biz_results@yahoo.com)