Is There "White Space" in Your Customer Relationships?

When managing sales relationships with major accounts, is it better to have more points of contact between vendor and customer—or fewer?

The answer depends on whether those interactions add value to or subtract value from the customer relationship, according to Rob Cross, an author and expert in social networking, who led a symposium I attended last week, “Leading in a Connected World.”

More than "fuzzwords," social network value added and value subtracted are measurable and meaningful in financial terms. Yet C-Level executives don’t think that way when creating CRM processes, account teams, and collaborative sales models. Oddly, the same companies that routinely scrutinize the cost of airline tickets don’t track efficiency of collaborative activities—a potentially far greater expense. That irony was underscored when the majority of the symposium attendees indicated that well over half of their time was undocumented, and spent in internal meetings, on the phone, or answering email.

Ever since the words “social” and “networking” were joined to mean informal channels of communication, CRM practitioners have offered conflicting ideas about how to make collaboration more effective. One Symposium insight: sometimes, “less is more.” This is because not every interaction produces value. Which interactions are the most valuable? According to Professor Cross, the best opportunities for value-producing collaboration are best-practice knowledge transfers, innovation, and revenue generation activities. The absence of those value-producing activities might be considered “white space” in the customer relationship. In Professor Cross’s words, effective collaboration doesn’t mean “everyone in the woods singing Cum By Ya to each other.” By uncovering where value is added or subtracted in collaboration, companies can garner the right resources, manage staffing, and organize teams.

So where is collaborative value added and where is it subtracted? Value is added when tacit knowledge for best practices, innovation, and revenue generation is exchanged between individuals. As for subtraction, there are two major sources. If the outcome of collaborative activities provides neither productivity improvements nor cost reductions, then those activities are value-subtracting to an organization. Second, consistent negativity from even one employee can have a measurable, cascading impact on the value an organization produces. And the impact is magnified in organizations that depend on collaboration for executing strategy.

In a PowerPoint slide, Professor Cross illustrated a basic social network. When individuals in a large, multinational company were asked “who do you receive information from and provide information to,” the network’s visual similarity to a giant hairball was stunning. It's easy to get the impression that everybody talks to everybody. I would be challenged to explain to a CFO how that picture portends to drive value for his or her company.

But underneath that picture, communication silos exist. These silos are losing favor, particularly for business development operations. One symposium panelist, Tracy Cox, Director of Performance Consulting for Raytheon Corporation, debunked the idea that selling activities should be the exclusive domain of the sales department. He recommended that companies consider different collaborative routes to engage with high-potential prospects, noting that it’s important to “understand the key influencers and reputation holders in the customer community and how to leverage those connections for new business.” It’s myopic to think of the Account Executive as the focal point for facilitating those connections.

When more specific relationship questions are asked to produce the social network model, the lines in the amorphous hairball social network strip away, yielding valuable insight. Who energizes you in your business activities? Who do you go to in order to generate revenue? Who gives you a sense of purpose? When these connections are mapped, patterns emerge that are highly predictive in how real value is transferred within and between companies. Not surprisingly, for these questions, the best performing account teams not only had strong client connections, but also better networks into their own organizations.

In addition to the Raytheon panelist, two other panelists, Lisa Vertucci, Managing Director, Global Head of Talent Development of Lehman Brothers; and John Helferich, former Vice President of Masterfoods USA shared how their organizations have used social network modeling to create value through collaboration. The operational decisions they made began with asking these questions:

How can we make invisible value visible to our customers?
How can we create the most effective cross-boundary relationships?
How can we identify key new business opportunities?
How do we uncover which people provide greater than average value in cross-selling products and services?
What is the most expedient way to “grow the conversation” about an important topic?

As with forensic sleuthing for suspicious financial transactions, following the money path in a social network context provides a good starting point for figuring out what’s valuable—and what’s white space—in your customer relationships.