Return on Behavior Magazine
Home for marketing and customer service professionals

Customer Experience

June 8th, 2011

Relationship capital: the new currency in customer services


Companies are traditionally valued based on profit, assets and liabilities, but Scott from Loving Outdoors argues that these criteria may not be enough any more…

In the newly social online world are these criteria still enough?

What is relationship capital?

The growth of social media has given customers real power, and a voice. Poor customer service can lead to a negative Tweet or Facebook post that can snowball to cause long lasting damage to a company’s reputation.

For businesses who don’t truly value customers this development will come as bad news, but for others this digital rebirthing of the customer came as a glowing opportunity and has, in my view, ushered in a new criteria into the valuation process, something I term ‘relationship capital’.

For example, Mr Smith buys a tent from Loving Outdoors. Rather than go through the transaction in a purely matter-of-fact way, we spend a bit of time getting to know Mr Smith (without being invasive).

We might ask him what drew him to the tent he has purchased and where he is likely to use it; he has taken the time to look us up so it follows that we should show a similar interest in him.

We might even keep in touch with Mr Smith to see how he is getting on with things. Mr Smith likes this: he likes that we talk to him using real words about real subjects rather than in regurgitated salesman jargon, he likes that we’re interested and he likes that we are human beings capable of understanding his own personal needs.

So why should we care how Mr Smith feels after dealing with us? We’ve got his money and as a business that’s all we’re interested in, right? Well, no, money on its own is useless – it sounds like a glib point to make but it’s something often forgotten in business.

What really improves our lives is not fast cars and huge houses with en-suite bathrooms and luxurious shag-pile carpets, but our ongoing relationships with people.

Businesses thrive on good relationships

It’s on this philosophy that the idea of ‘relationship capital’ is predicated. Businesses, like people, thrive on good relationships and, like people, don’t appreciate being treated as a money generating mule-horse expected to carry on regardless of conditions.

Just as man cannot live on bread alone, nor can businesses, you can’t just pump it full of money like some kind of awful capitalist Foie gras, you must nurture your business with the thing it loves best, namely, relationships.

Relationship capital in action

So, where does Mr Smith fit in all of this? Well, after speaking to us he decided to take the dog for a walk in the park where he meets Mrs Jones, a woman he knows from church (i.e. a woman he has a relationship with) whereupon Mrs Jones asks Mr Smith what he’s been doing.

“Oh not much, but I’m planning to go away this weekend” he answers. “Sounds lovely. Anywhere nice?” asks Mrs Jones. “The Lakes – I’ve just bought a tent” Mr Smith replies. “Brilliant! Where did you get it from?” asks the inquisitive Mrs Jones. “From a company called Loving Outdoors, they were ever so nice”. “Oh I’ll have to look them up”. And then they go their respective ways.

What might at first appear to be innocuous chit-chat is in fact relationship capital in action. Although the company balance sheet will show little immediate sign for this exchange having taken place, the relationship gained in Mrs Jones makes the world incrementally more Loving Outdoors friendly and thus, a more nurturing environment for us to exist in.

As Mrs Jones mentions us to her friends and family this nurturing effect is multiplied exponentially. As word of Loving Outdoors passes from mouth-to-mouth the extra nourishment starts to work its way through the metabolism of our business helping it grow and slowly, ever so slowly, positive effects start to show, all because we were friendly to Mr Smith.

Isn’t this just good customer service and word of mouth?

Yes, but it is customer service delivered with emotion and integrity; something that cannot be learnt in a training room.

Service delivered on an emotional level, a relationship capital level, comes naturally when you are doing what you love. It’s comes from an insatiable desire to make a difference even if you are not making money.

But let me assure you that we make money here, but that is not our primary focus and never has, it is more a by-product resulting from our ongoing friendship with Mr Smith and now Mrs Jones.

So, remember the online world is characterised as a place of open community and sharing, an online transaction becomes an experience to be shared.

In this dawning e-social age, the future lies with companies who can be a friendly face in the crowded and anonymous online market place. Putting a face to a name is the essence of relationship capital.

About the Author

Scott @ Loving Outdoors

As the Managing Director, Scott spends much of his time dreaming up ways to improve Loving Outdoors but also likes to be involved with customers - you'll often speak to him if you call the office. When not loving outdoors in his work life, Scott can often be found loving outdoors in his spare time, cycling or walking in the hills of his native Cheshire.


art of keeping

Measuring the customer experience

We take a look with Fredrik Abildtrup, the CEO of TeleFaction on how to measure the customer experience.. Using his experience, he takes us through the steps that we need to go through in order to really gain the insights of th...
by James Digby

costy of bad cem

Bad customer experiences are more expensive than you think

How much does a bad customer experience cost? The number may surprise you. I read an article on yesterday that shared results from the Tealeaf 2010 Online Transactions Survey conducted by Harris Interactive. T...
by Tim Sanchez


Global Customer Service Barometer

The recent report published published by American Express® tells us the state of the customer service industry - with some interesting findings! Below you will find a handy infographic to help you digest the details. If ...
by James Digby


Why Regular Communication helps Customer Retention

Why Regular Communication helps Customer Retention

Your ‘herd’ feel you’re interested in them It enhances the sense of value in what you offer It increases their awareness of  ‘you’ as the person they have a relationship with Even your laziest customers are kept info...
by Joe Pélissier

challenging cms

Why You Should Love Challenging Customers

Author and speaker Jeff Korhan discusses why you should find those customers you would usually say no to. Most businesses have three type of customers: The Majority in the Middle Lower Echelon Challenging Upper Echelon Challeng...
by Jeff Korhan


road to cm experience

The Road to Customer Loyalty

Customer satisfaction has long been the predominant measure of a company’s success. While it’s important to satisfy the customers your business serves, perhaps the most important measure of success for businesses—large a...
by Peggy Carlaw

brand vs customer

Brands versus the Customer Experience

To understand what is relevant and does get traction with customers, it is critical to recognize that the pursuit of market share and commodity sales are not the same thing. Germane to this distinction are the two buying perso...
by John Todor


10 resolutions

10 Customer Experience Management Resolutions for 2011

10 steps to creating a successful customer feedback program that you can start doing straight away to produce results! 1. Plan the project and get top-level management support  Establish a vision of customer experience for...
by TeleFaction A/S


Improving Customer Service

Many business owners place so much effort on creating a quality product and gaining new customers, they often do not think about the need to retain customers after they purchase the product or service. Quality customer support ...
by Tyme White


The Three R’s Of Customer Service Or “Can You Relate?”

Great customer service is a decision that starts as part of your company mission statement. It must be included when defining your company values and business plan. It must be supported and believed through out your entire orga...
by David Mount



Be the first to comment!

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Anti-Spam Quiz: