book.chapter Mutual benefit principle - avoid exploiting others

Focused in those business segments where leadership can be achieved. They look for an "economic sweet spot" where the firm has the potential to offer outstanding customer value. They attempt to utilize a well-tuned strategic engine, harnessing the rational economic advantages generated by an intensive focus on the core business. They continue to streamline business processes over time to enhance the firm's focus. They advertise less because they are geared towards generating new business through word-of-mouth endorsements from satisfied, existing customers. Successful loyalty leaders stay on course by eliminating any distractions, like new business lines of marginal strategic importance or business turnarounds. They are always prepared to exit businesses which detract from a firm's focus. They acknowledge when a core business has become a liability rather than an asset and make the internal structural changes needed to allow the business to refocus on a better commercial opportunity. They are wary of the conventional Wall Street wisdom and refuse to allow investor's priorities to overwhelm the strategic moves the management team believes should be made. They grow from a position of strength by doing more of what is already working successfully for the firm: deepening relationships with existing customers, acquiring additional customers in the same segment, and launching customized local versions of products. On the high road, it is not enough that your competitors lose; your partners must win. So focus exclusively on business opportunities where you can be the best, and align partners around the overarching objective of upgrading the customer experience. Only an unrelenting focus on customer value can sustain the economic and ethical superiority of high-road strategies and create the conditions for trust, commitment, and mutual success. Leaders who aspire to foster loyalty leverage a comprehensive understanding of their industry's dynamics and their discipline to devise strategies that safeguard the interests of their business associates. The primary objective is not to ensure the defeat of competitors, but to guarantee the victory of partners and suppliers. The business strategy often referred to as the "low road" involves saying and doing whatever is necessary to secure a customer sale, even if it means resorting to half-truths. On the other hand, the "high road" strategy involves striving to deliver substantial value and service to customers and to establish a long-term relationship with them. Loyalty thrives and grows only when the high road strategy is consistently implemented. Similarly, other partners also need to be dedicated to choosing the high road option. Every customer solution will be the outcome of the collective efforts of employees, dealers, vendors, and investors. If the entire value chain is not equally dedicated to creating superior value for the customer over the long term, there will be inconsistencies and disputes. The high road necessitates that everyone in the value chain succeeds as the foundation for a sustainable competitive advantage. You will never be able to enhance customer service and performance standards unless you have the full backing of your partners. That support will only come if your partners trust you not to profit at their expense, based on the fact that you always keep their interests in mind and initiate changes that benefit them as well as you. Therefore, developing win-win solutions involves working hard to allow partners to have significant input into all decisions made, thereby enriching your partnership. It also involves actively seeking your partners' input, especially when difficult decisions are being made that will have ripple effects on their businesses. And if necessary, making changes that reflect and build on the ideas and suggestions put forward by your partners. It also involves having the discipline not to proceed with new business initiatives that will not benefit your partners. Trust among partners is built up over time, yet all it takes is a single instance of betrayal to destroy years of work building a relationship. Leaders who want to build loyalty and generate the loyalty effect must exercise extreme discipline to protect their partners' interests. They understand that the key to winning is not to ensure their competitors lose, but to ensure their partners win. Loyalty leaders don't attempt to compete with copycat products in every business sector that is currently trending. Instead, they only enter those markets where they and their partners can genuinely add value. More specifically, loyalty companies are disciplined, striving to excel at a few things rather than being average at many. They resist the temptation to acquire other businesses simply because they are available at bargain prices. They seek leadership and stay. Loyalty is not about bribery and hostage taking. It's not about jackpot schemes or frequent-flier miles. It is about improving people's enthusiastic commitment to a relationship that will improve their lives over the long term.