Building Consumer Confidence
Long-term
Customer Trust
With all the hype and focus on marketing in the present business climate, the importance of building long-term customer confidence is often overlooked. Profit centers have become the primary emphasis of businesses with executives looking at immediate financial benefits. The long-term viability of the organization is often sacrificed for short-term gains. However, consumer confidence is the key to long-term success in business. And, even though this takes time to establish, it is well worth it in terms of building stability and adaptability into any business plan.
Yet, in the present business environment controlled by a powerful culture of executive self-interest, the needs and confidence of consumers are being ignored in favor of the get rich quick mentality of top management. And, they manipulate customers as though they have little belief in their companies or the quality of their products and services. We have become a society of short-cuts. Quick and easy roads to business success are advertised everywhere. Get rich quick schemes seem to dominate the airwaves of television and radio. And, nationwide, executives are quick to enrich themselves with bonuses and golden parachutes at the expense of their organizations and the economy. Consumers are treated as fools instead of wise buyers and prudent investors.
However, even with all the hype, the consuming public is becoming more savvy and increasingly sophisticated. More and more investors and buyers are sharing information on the internet and determining which businesses are worth building a relationship with. Gradually, the confidence of consumers is determining the success of businesses worldwide and is helping to build increasing quality into the development of products and services. Products, services and companies can be compared and discussed openly and freely among those customers willing to do their research and comparative shopping. And, the evidence is clear that the consuming public is more sophisticated and knowledgeable than ever before. In time only those companies that are able to respond to this new wiser consumer will survive and prosper for the long-term.
Without the Collaborative Leadership abilities to build organizations that are responsive to consumer needs and concerns, the self-serving executive culture is sacrificing the future of their companies and their employees in favor of short-term gains and individual benefits. Given the choice between self-interest and immediate profits or building confident customers for the long-term benefit of the organization, the Collaborative Leader of the future will choose customer confidence over self-interest because he has the vision to see the long-term benefits to the organization and he has the teamwork values and ability to put the interest of the company first. The following is an example of how a Collaborative Business Leader was able to make the best choices for his company to build consumer confidence and a better society.
Years of neglect by the insurance industry to successfully monitor cost and create a more efficient as well as consumer oriented health care system has created a situation in which costs have spiraled out of control. And, over 50 million Americans are uninsured or without adequate insurance coverage with many having lost confidence in the ability of the health system to provide adequate care for the masses. Ted, the general manager with Healthcare of America Insurance Company, has recently been promoted to the position of President. As general manager he supported the typical cost control measures, but, when he voiced his concern about how poor the monitoring system was, he was countermanded by others who claimed the uninsured were draining the system and not the lack of cost control. Now, as the costs have gone out of control, even those who once could afford insurance are complaining about the large increases in their premiums. And, increasing numbers of customers have dropped their coverage completely. Ted has been hired by the company’s board of directors to find a way to control expenses and provide more service to the increasing number of uninsured and underinsured Americans.
The first thing Ted did as President was to assign people and auditors to monitor the out of control expenses. No more would hospitals and doctors be allowed to charge ten dollars for giving a few aspirin or three hundred dollars to check hearing problems when a patient complained of sinus and sore throat pain. All other expenses were monitored more closely as well without sacrificing the quality of care being given by doctors. Most importantly, he began to collaborate with the hospital administrators on ways to computerize medical records to improve efficiency in the system. Poor information processing has been costing the health industry millions of dollars over the years. However, Ted’s greatest challenge was to find a way to work with the government to provide health care to those who were uninsured and needed it most.
The uninsured, even though they did not pay premiums, were costing his company and the entire health care system millions when they became sick and required humanitarian care by health professionals at hospitals and clinics throughout the country. Also, Ted realized that it was not only the practical choice it was the only choice for his company to become a part of a national reform of the health care system in order to provide insurance universally to all American citizens and residents. He understood that no company could continue to provide insurance for only part of the population without eventually destroying the system. Also, the company could not afford to continue to lose the confidence of their customers with the increasing cost of premiums. And, most importantly, he realized that we all must share in the cost of helping each other. So, Ted began to meet with government officials from the federal government as well as individual states to find a way to work collaboratively to provide universal healthcare insurance coverage.
Gradually, Ted’s collaborative efforts began to pay off as he successfully was able to find ways of cutting costs without sacrificing the quality of care saving his company millions of dollars each year. And, by collaborating with the government he was able to find ways to lower the insurance premiums for most customers and provide adequate coverage for all based upon their income and ability to pay. This ability to pay program, which was based on income, became very popular with customers nationwide. It was subsidized up to the minimum standards for care set by government and applied to all insurance companies. As a result, large numbers of new customers applied for coverage by Healthcare of America which added new revenue along with the savings from greater efficiency and cost cutting. And, in collaboration with government auditors, the entire program was monitored for cost. Soon, the overall savings nationwide reached the billions with greater efficiency in handling the costs and records of every patient who needed care. Most importantly, however, a significant part of the program was directed toward preventive health care, which began to cut the overall need for emergency and long term treatment nationwide.
As President, Ted finally found his voice as a Collaborative Leader and by working as a problem solver with other health care companies and the government he was able to find ways to cut costs and help save the health industry from a catastrophic collapse. Also, the growing confidence of the consumer helped to bolster business, increase profits and build a new belief in his company and in the healthcare field in general. Most of all, as a high synergy humanitarian, he was able to reconcile the financial concerns of his company with the democratic and social needs of the nation.
Note: The above article is based on the concepts and example included in the books, Collaborative Leadership and Global Transformation and The Price of Freedom by Timothy Stagich, Ph.D.
Discussion
Questions
- Why is building consumer confidence so important for the long term viability of business as well as the entire economy?
- What has created the get rich quick mentality of business management and what can be done to eliminate it and return to the practice of prudence and long term investment in people and resources?
- How did the self-serving executive culture develop and how can we begin to develop a new culture of Collaborative Leadership in a democratic society?
- How are all businesses connected to the importance of building customer confidence and how does consumer choice relate to the maintenance of democracy and free enterprise?
- How has the health care industry undermined consumer confidence in the past? How did the new President of Healthcare of America work to help change this?
- What did Ted do to reduce cost and improve service to consumers?
- How did Ted work to provide universal health care to all Americans?
- Why did Ted succeed when so many other health care insurance companies failed?
- How did the Premium Program work and why was it so popular?
- How can Pharmaceutical
Companies help to cut the cost of health care and build consumer confidence in the health industry?
