CUSTOMER SERVICE IS A NON-ZERO SUM GAME

WINNERS AND LOSERSscale

The world of business is a rough-and-tumble enterprise among competitors. One side wins; the other side loses (Even so, the role of a competitor, to paraphrase what U.S. Supreme Court Justice Louis Brandeis said almost a hundred years ago, is to best and not kill the competition). That is as it should be if we believe that economic winners do a better job, over the long run, than losers bringing to the markeplace superior, more cost-effective products and services. Economists and game theorists speak of such an outcome as being zero-sum: one participant’s win is exactly offset by the other participant’s loss. In a free market, of course, even losers win becuse they too are the beneficiaries of the availability of improved products and services.

SERVICE: A CLASSIC WIN-WIN

A customer relationship, however, must be understood to be a non-zero-sum game. A classic win-win has both supplier and customer benefiting from each other’s commercial interactions. This is a case where the sum of the interactions is not zero.  If competition describes the behavior that helps the enterprise acquire customers, then it is cooperation that allows the enterprise to retain customers. Cooperative behavior benefits the supplier in the conventional financial sense but in more subtle ways as well. A customer, particularly a cooperative one, is a beacon illuminating certain market needs and insights that the supplier might have no other way to acquire, except, of course from another cooperative customer (or perversely, through industrial espionage). Cooperative behavior, as it is symbiotic, also benefits the customer. How else, but with the suppliers’s cooperation would the customer have the ability to fulfill his product and service needs; and in a business-to-business relationship, how else would the customer fend off his competition?

Cooperation between supplier and customer as well as between supplier partners opens new vistas that facilitate innovation and thus the creation of new wealth. This paradigm is simply not achievable except through the mutual cooperation of the participants. Cooperation creates a system of mutual and collective intelligence clearly superior to one that might exist if the parties were strictly transactional – not to speak of participants who viewed their relationship as one of tit for tat. Even nominal competitors can, at times, benefit more from cooperation – through joint ventures, shared research, etc. –  than from competition. Unfortunately, the behavioral approach to business today is not be generous but to resist giving what you are not forced to give.

 

Management Advisor

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