Episode 15: Build Profitable and Long-Lasting Relationships with Bryan Rutberg

Mike O'Neill: Hello and welcome back to the Get Unstuck & On Target Show. I'm Mike O'Neill with Bench Builders, and we're speaking with thought leaders to uncover tips to help you break down the barriers that are keeping you or your business stuck. Joining me today is Bryan Rutberg. Bryan is the founder and president of Seattle based 3C Communications.

Welcome Bryan.

Bryan Rutberg: Mike Good afternoon and hello to our watchers and listeners.

Mike O'Neill: Well it's good to have you back. For those who don't know Bryan, Bryan was an expert panelist on our webinars series and I've asked Bryan to come back and share how he and his company works with leaders in sales and marketing and customer support to build more profitable and long-lasting relationships with their customers.

And as we're thinking about how COVID has impacted our economy, it just strikes me, and I hope it strikes our listeners, how critically important it is to be keenly aware of our customers and the value they bring.

So let's just jump right in. Bryan, the name of your business is 3C communications.

What does 3C stand for?

Bryan Rutberg: Well, one of the joys of owning a business is you get to make these decisions and you can sort of represent what you want. When I started the business, I referred to it as you've got to create your message communicate it out, but it's most important to connect with the audience that you want to reach — create, communicate, connect — and over time that's taken on.

My clients have led me in a new direction with it. Now I tend to refer to 3C as the Customer Connection Company — helping, as you said, companies build stronger, longer-lasting, and more profitable relationships with their customers.

But it's all about the customer. Whether you think about it for the communications first, or you think about all of the things that go into building great customer experience, it let's call it the communicator, the customer connection company.

Shall we.

Mike O'Neill: That we will. And you made reference to the value of the right customer relationships, but you've also introduced me to this notion of customer lifetime value. What do you mean by that phrase?

Bryan Rutberg: Well, and it's certainly nothing I can lay claim to as my own CLV or CLTV customer lifetime value is a fairly well established concept out there in the world that I live in of "what is it worth" — on a purely financial perspective — what is it worth to have a customer through the lifetime of your relationship.

So whether you, if you're selling diapers, you might have a customer for a year at a time. If you're selling life insurance, you might have a customer over the entirety of their lifetime.

And if you're a retailer or you are a professional services provider, it's largely up to you and how you treat your customers and how they feel about you, just how long that relationship goes on and what they're going to tend to spend with you versus your competitors or other choices that they have.

Mike O'Neill: I hope this question's not too technical, but we've got leaders who are listening in.

If you were to kind of in broad terms, share with us, how do you kind of calculate the customer lifetime value? What are some things that we need to be mindful of?

Bryan Rutberg: And this one's fairly straight forward because it is just an equation. What we can talk about is that it, it leaves a few things out that I consider to be important and companies find out are more or equally important to the financial value.

But how much is your customer or client spending with you in a given transaction?

How often, over a particular time period, do they do that transaction. So if someone, if you're running a software as a service company, you know you're getting paid 12 times a year or four times a year, if you're going on a monthly or quarterly basis.

But you know, there's other businesses where customers choose to buy from you as they choose to buy from you.

And you can impact the result of the equation by either increasing average spend per engagement or increasing the frequency of engagements. And then the last, very critical component of this three part equation, is what is the lifetime of the relationship.

So if I'm selling you cars, do I want you coming back every three to five years to buy cars? If you're going to another dealer. I've lost out because I only get one bite at the apple with you. If I'm selling you and your family cars for a lifetime, and you're like, "Hey, you've got a much higher customer lifetime value."

So it's average spend per transaction. Total number of transactions. Multiplied by each other and then multiplied by how long is the overall relationship that gives you your formal CLV or CLTV.

Mike O'Neill: You've given us a very exact way of calculating that, but you've also have shared with me before we were even recording this podcast, this idea of customer closeness. And I suspect that's probably a bit harder to quantify, but when you use the term customer closeness, for our listeners, what do you mean by that?

Bryan Rutberg: Well, this is the part where I love living my life because there's lots of people who marketing leads and sales leads — they spend a lot of time on those elements of the equation. Especially how much is being spent in this transaction and how do I get upsell or how do I get cross sell and increasing the frequency of transactions?

There's less science put behind how long do I keep this customer? Over what period of time and how many transactions. But even there, you get kind of a bloodless number and it can remove the human on the other end of the transaction from your thinking.

Where I will always help clients think about how to improve customer lifetime value and indeed all the stuff I do should flow back to that.

But there's much more. There's, if you're building customer closeness, you are building a relationship. And that relationship comes to fruition when a customer says in a business to business world. "Yeah. I'll do a referral for you. I'll tell someone else they should do business with you, or I will serve as a reference for you"

Or in the world of technology companies that I've spent a lot of my life in it's, "okay. I will be a member of your customer advisory board."

So you can get the voice of your customers deeper into your head, as you're doing planning and strategy and thinking about how you're going to execute and charting customer flows and customer journeys and the touch points that you get to make an impression with a customer.

I value customers and clients based on, "are they willing to come sit on a panel or speak at a conference and say, nice things about me?"

Will they pick up the phone when I put a prospect in touch with them? And these are things that you can quantify by numbers. It's a little harder sometimes to quantify by value, but every single one of these things starts to answer the question that I ask when I go around the country — well, used to go around the country — doing lectures and corporate events... asking the question in a keynote — do your customers love you enough?

That's what I love to get at —  it's how do you start to feel so passionate about a product or how do you get your customer to feel so passionate about your product or service the underlying company, the way they get treated that they will, in word, deed and spend, demonstrate that love and feel like it's returned in a real way.

Mike O'Neill: Yeah. I love this expression. Do your customers love you enough?

It really gets through the quantitative discussion we just had. And it kind of asks those questions and you've been stressing the power of relationship.

And I think you're trying to highlight that customers are not necessarily there for transactions. You're trying to encourage leaders to be mindful of these customers, if you are in relationship with them. And you're striving to be closer to them that. Deepening of the relationship will probably the long-term most definitely impact the long-term lifetime value of that relationship.

Bryan Rutberg: For sure. And let's be clear. I, we all of us somewhat know intuitively you know, the old saw the customer is always right. You still want to look at your customer base — all of us who have been fortunate enough to work in companies or grow companies to the point where I do a certain amount of work with startups or used to be startups who still think of themselves as on a fast growth trajectory early in the life of a business.

You're spending an incredible amount of time just trying to "new deals in the funnel need deals in the funnel, new deals in the funnel."

And at some point you wake up and look around and say, I've actually got a business here and I've got this goldmine of existing customers. Now I need to start thinking about how do I turn that into an engine for more growth?

Yes. Continuing to fill the pipeline. And that's where referrals and references come in cause those help reduce the cost of sales.

They help introduce you to people who are already predisposed to liking you because they know someone else who likes you. And that influencer sale is very powerful.

But it's also folks who can spend more with you and who you can bring out the love. In,  I had a boss early, early in my career, not long out of college who, when I would bring back to him, a report from a customer I had visited with showing off his graphic design work or his copywriting work — it was a small ad agency — if the client had the temerity to so much as suggest a change to anything that this creative genius whose name was on the door of the firm.

But he would — half kidding — you know, pull himself up to his full... this man was maybe six, five, six, six former college football player. He had rounded out a little over the years, but he was still an impressive figure and he would just sort of put his hands on his hips and "Scott! Customers. They should only be allowed to write checks."

And that attitude — while not exactly pervasive — there's a lot of folks who look at just the financial end of the relationship and it is too transactional.

And man, you just miss so much when you don't invite your customers to get into a relationship with you. That said, and picking up off of your comment, you got to segment your market. You've got to, you do need to figure out which customers are draining you in which customers are bringing you outsized contributions.

What business do you really want to be in? And how do you serve the customers who are going to help you build the business you want to build and are going to make it a two way street instead of just taking.

Mike O'Neill: Got you know, Bryan, you had mentioned that you'd worked in some technology companies, and I know that prior to starting your own distance, you worked for some pretty impressive companies to include HP, McKinsey, and Microsoft and keeping with this podcast theme, could you share with our listeners maybe an example by which your employer got stuck and what did y'all do to get unstuck?

Bryan Rutberg: Yeah. And I had, I don't know if it's the good fortune, but I certainly had the opportunity through a couple of economic downturns and big corporate changes to watch companies that I worked for get stuck and then see how we fan managed to get ourselves out of the mud.

So to speak, the most notable example was later in my corporate career for a period of time. When I was at Microsoft, I led the company's executive briefing center and the program that took place within it. My team was responsible for working with sales representatives all around the globe to bring senior business leaders and sometimes technology leaders as well from wherever their home was around the world into Redmond, Washington, Microsoft home to do meetings with top product people, top corporate executives, and for us to really connect with them and build a strong relationship with the people who made buying decisions and implementation decisions and who really needed to, they were responsible for the strategy in their organizations.

And we wanted to position the technology is more than an enabler and something that really could help you achieve your corporate goals. And I was there from seven until 10 in that particular role. And that means that I was there right in the midst of the global economic downturn at the end of the last decade.

Oh, gosh, that's two decades ago now, anyway, the end of the 00ts and, and what we did to drive more customer engagement at a time when you know, this is an environment where, because we had global demand on the space and on the program that my team ran, we were booking visits six eight months in advance.

It was not at all unheard of as seniors executives from the largest bank in Portugal or the largest manufacturer in Brazil as they were getting up to leave one visit, we put the next one a year later, back on the calendar. And in this environment suddenly we were getting hosed.

Now we're not gassing up the corporate jet. We're not having our people travel.

We're really in a global economic downturn turn. And my boss on the one side and my team on the other and I kind of looked at this and realized the quality of this asset that we had and how to make sure that it didn't go to waste during a time when travel was a little dicier.

We helped Microsoft literally get unstuck and helped several of our clients customers get unstuck by saying to our — an important audience for us — the global sales organization and the management of it, you know what we're opening our doors wider than usual.

It used to be that there was only a limited number of Microsoft customers that we would invite to come join us for this incredible experience that we gave. And we turned that rapidly into, Nope, we've got 16 briefing rooms. We want to keep them as full as we can. We're going to waive our requirement that you book far in advance.

If you've got a deal that feels like it can go down.

If you use this, if you use this facility and our services, we're ready to start creating bespoke programs that we can put together in a short period of time, we started doing that. This is 12 years ago. We started doing video conferences where we brought our speakers into rooms and we engaged customers who were sitting in their home offices, whole new model for Microsoft.

And we started saying to sales reps around the world. If you've got something that feels like it can close work through your country management, but we're not keeping any of the usual restrictions on let's get deals working. And obviously we now know that recession did indeed end, but Microsoft maintained a great business flow.

Even during that, as we started being able to change, not just the way we engage with our customers, but the story that we told them about how to enable cost savingsq and bringing more profit down to the bottom line, through the use of technology. So that's kind of a long answer, but yeah, we were stuck. We didn't know where things were going to go when suddenly we had people who had visited with us that year saying, yeah, I'm not going to make it this year.

And we were looking at empty rooms, which is the bane of our existence.

Mike O'Neill: You know, Bryan, that illustration seemed like a perfect way to kind of highlight what are we dealing with now? And that is in many respects, the exact same issues are presented. There's a concern about travel, be it because of COVID or because of economics, but what really intrigued me about the example you just shared is.

The company, Microsoft, a huge company that had a, basically a machine in place designed one year in advance to offer this type of top line experience for big customers — is that you all stepped back and said, we've got capacity. Why don't we fill that capacity. And the fact that they were willing to be nimble and change on the fly it sounds like that served Microsoft well.

Bryan Rutberg: Well, and for those of us who were behind proposing this shift to senior management, because you can imagine the executive briefing center is a place where — back in those days — Bill Gates and Steve Balmer were regular visitors to meet with senior executives from our top customers, the fellow who was then the chief operating officer of the company.

I mean, this was, this was an executive environment. So we knew we had eyes on us. So when we raised our hands and said, you know, here's what we want to do. Here's how we want to pivot. Okay. It wasn't just good for Microsoft. It didn't do any harm to any of our careers past that point too, because we got, we've got a reputation for being nimble and thinking of company first, but it was really little secret — customer first and, and it was, yeah, it was all the things you said and more.

And we, we felt great pride at helping the company figure out a way out of, or a way through this situation, which we had had nothing to do with, we hadn't brought it upon ourselves. We just knew we needed to be nimble in order to figure out a new way around.

Mike O'Neill: So Bryan you've given us some very solid suggestions on how leaders should step back and look at customers, maybe through a fresh lens.

If I was to ask you to kind of reflect on the time we've been together and you were to kind of summarize the things you want to make sure our listeners have in their mind is takeaways. What might that be?

Bryan Rutberg: Yeah. Let's start with where we started our conversation, customer lifetime value while you know it, that classic phrase necessary, but not sufficient.

It is necessary. You really should have a handle on what your customers are worth to you and have strategies for increasing that value. Same thing I would say for the other very common measure in my business net promoter score the classic question on a scale of zero to 10, how likely are you to recommend to work with Mike O'Neill and Bench Builders?

And if it's a nine or 10, all good. If it's a seven or an eight, you consider that neutral anything, six or lower is a detractor. And then you do a little bit of math to come up with your index score and you can compare to others. Every business leader really should have a handle on how their company is doing in terms of monitoring and then over time, increasing customer lifetime value.

And the same thing with net promoter score and should have strategies for addressing those folks who fall into the detractor category because that's not love. The second thing I'd want to take away is once you've got those baselines start thinking about everything else you can do to really drive customer closeness and get the customers you most want to engage with you and engage with the rest of the world on your behalf.

How do you bring them in? And whether that's doing occasional focus groups or creating actual customer advisory councils, or customer advisory boards, thinking about the programs that you run for your customers, some organizations will find they want to create a loyalty program.

Some companies will find that they want to build and sort of off-cycle touch points to connect with key decision makers, just to check in with how things are going outside of a sales cycle, lots and lots of things that can be done.

So start with customer lifetime value in net promoter score. Know those things think about how you're going to increase them, move to greater engagement.

That's a little harder to quantify with building customer closeness. And then finally, it's sort of a corollary to that. Think about your own culture. If you've got the right communications to your customers, if you've got the right programs, now think about how your culture uses that information and get used to it.

Creating a culture of strong listening capability because your customers will, if they, like you tell you exactly what they need to like you just a little bit more.

Know the numbers. Yeah. Build closeness and keep your head on so you can listen.

Mike O'Neill: Okay. Well said. If there are folks who would like to continue this conversation with you, what's the best way for folks to reach you online?

Bryan Rutberg: 3C Communications has a website. It is threeccomms.com. And through that, you can find again, the newsletter that I offer once to twice a month, you can find lots of information about the company and my philosophy on building customer engagement, and you'll see front and center that great question — do your customers love you enough? Come find me there. Shoot me a note. And let's talk about how you can create more customer live in your environment.

Mike O'Neill: I want to encourage our listeners to do that very thing, Bryan, thank you.

Bryan Rutberg: My pleasure. Thank you to all who have paid attention here. And Mike, as always thank you for your friendship and, and finding this topic as interesting as I do.

Mike O'Neill: That, I do, and I trust our listeners do as well. And I want to thank our listeners for joining us for this episode of Get Unstuck & On Ttarget or line up great thought leaders, like Bryan, that I'm sure you'll enjoy getting to know. We upload the latest episode every Thursday, and I hope you'll subscribe via Apple, Spotify, or whatever your favorite platform might be.

But if you've been listening to our podcast or this discussion with Bryan, and you're realizing that something's keeping you or your company stuck, let's talk. Visit unstuck.show to schedule a call. We'll explore, what's got you or your company stuck and what you can do to overcome it. So I want to thank you for joining us and I hope you've picked up on some tips that'll help you get unstuck and on target. Until next time.