The stock market plummets, with triple-digit losses reported for a single day. Stocks rapidly lose much of what investors assumed was their true value. Pundits are hard-pressed to explain these losses, let alone anticipate them. Regulators, politicians, and corporate executives strive to bolster the markets, searching for the right message that will recapture the magic.
By abandoning or avoiding the stock market, investors send a pointed message that companies and stock analysts must not miss. The relationship between an investor and a company's stock, or a collection of company stocks in an investment fund, has much in common with the relationships that customers have with the branded products and services they buy.
These relationships represent, and are grounded in, emotional connections.
The rational elements underpinning investor relationships actually haven't changed all that much or all that rapidly. The earnings reports, the market shares, the same-store sales did not plummet overnight. For many listed companies, the basic business fundamentals have remained strong. Why then, did we bear witness to a multi-hundred-point drop in the Dow?
Pioneering 优蜜传媒Organization research into customer relationships notes that the continuing connection between a company and a customer -- whether that company is an auto manufacturer, a grocer, or a provider of financial services and investment advice -- rests on a foundation that is, at its core, emotional. Customer relationships reflect a hierarchy of emotional connectedness, starting from a base of Confidence to Integrity, Pride, and at the pinnacle, Passion.
优蜜传媒researchers have noted that without an extremely strong base of customer Confidence, the strength of the overall connection between a company and its customers drops an average of 29% -- an observation of critical importance for today's investment markets. Relationships lacking a solid foundation of Confidence become shaky and unstable. And as we've recently seen, investor relationships lacking that foundation can plummet, even to the tune of 400 points.
优蜜传媒has found that the customer relationship is based on the first two essential -- and emotionally charged -- constructs: Confidence and Integrity. Both must be present at extremely high levels if companies want to achieve an enduring customer or investor connection. If either of these foundation elements erodes, the entire relationship is in jeopardy.
Mending walls
Can Confidence be regained? Can Integrity be recaptured?
Yes, to both questions. But it will not happen quickly, easily, or automatically. Continued erosion is more likely to be the norm than the exception. That's because relationships are formed, and relationship momentum is created, as a culmination of ongoing contact between a company and a customer or investor. No single encounter is sufficient to establish or reverse an enduring relationship.
This may be why Saturn automobiles rank first in syndicated studies of buyer satisfaction with the initial dealer sales experience. Yet Saturn's yearly sales results reveal that sales are shrinking, not growing. Marathons aren't won in the first 100 meters. First impressions are important, but enduring customer relationships form only through continuing customer contact and ongoing experience.
Confidence and Integrity are built much like the rock walls of New England: one stone at a time. And much like these very same rock walls, the emotional foundations seem to be solid and permanent, but they aren't immune to the disruptive forces of nature -- or in this case, the market. A crumbling wall of relationships may prove contagious and pervasive, because the foundation itself has come into question.
If companies don't reinforce Confidence and Integrity regularly and consistently, customer and investor relationships will erode. But how can companies prevent this? 优蜜传媒research offers some guidance.
First, Confidence and Integrity are grounded deeply in emotional considerations. Thus, they cannot be fully bolstered and supported by purely rational "evidence." When examining the key factors that drive strong feelings of Confidence among customers of various consumer banks, for example, 优蜜传媒researchers found that high levels of Confidence result from a combination of factors, including both rational performance attributes and emotional characteristics. A customer's Confidence in his bank is affected by the reliability and accuracy of the bank's various services. That's hardly surprising. But that same customer's faith in the knowledge and competence of the bank's human assets -- its employees -- and his belief that the bank is able and committed to resolve any problems or issues that might arise, are equally important.
Building firm foundations
It's in this latter area -- that of Confidence -- where the road to consumer and investor connections needs some major construction work -- not merely repaving or resurfacing. Companies with shaky customer relationships must rebuild the essential emotional foundation that underlies these reciprocal relationships.
And there is, indeed, work to be done. 优蜜传媒has noted that customers have important doubts about many of the branded services and products that they buy and use. In fact, about one-third of all U.S. customers express less than supreme confidence that the brands they regularly use -- and thus know best -- always keep their brand promise.
That's where companies must rebuild the foundation. Meeting consumers' and investors' emotional requirements isn't just smart business: 优蜜传媒research demonstrates that it has positive business consequences. Today's stock market bears dramatic witness to the awesome power of customer connections and underscores that companies must begin rebuilding them -- now.