The ways some companies these days strive to keep their customers always amaze me as well as make me happy as a consumer. One place where you can easily find close company-customer relationships is car dealerships. In my own car buying experiences, most salespeople are willing to negotiate a special deal for each customer with the permissions from their managers even if by making the deal, they will not earn as much profit as they normally will for that car type. This kind of behaviors is also starting to become more popular among other industries such as the phone companies.
These actions would seem unreasonable a couple years ago, so how companies nowadays justify doing them? One of the main reasons I believe is the shrinking rooms for innovation and hence the increasing cost to truly differentiate your products from the others. For instance, Mercedes revolutionized the way people perceived coupe by releasing the CLS-class, a four-door coupe. However, Mercedes’s advantage earned by the CLS-class has almost disappeared now that other car companies also have their own four-door coupe available, such as Audi’s A7 and BMW’s 5-series. Moreover, companies nowadays have to invest much more recourses into their R&D departments in order to get the same results in the good old days. As a result, they shift their focus to building customer relationships, which in comparison is becoming more profitable. Also another reason, which has something to do with game theory, is companies trying to match competitors’ efforts to perfect customer service. As companies observe this level of efforts spent by their rivals on their customers, they also spend more resources in the same area in order to match the new standard of service quality.