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6/2/2006
04:15 PM
Rob Preston
Rob Preston
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Down To Business: Trust Is Earned, Every Single Day

Customers will forgive the occasional screwup, but don't make a habit of crossing them.

Most vendors don't just try to sell us products. They yearn to be our partners, our strategic advisers, our comrades in arms. The payoff for them, of course, is deeper, longer-term relationships and a larger share of our budgets. But relationships are two-way. Even entrenched vendors must go the extra mile to earn and cultivate customer loyalty.

Some of the biggest tech vendors, cocksure of their market preeminence, learned this lesson the hard way. Microsoft for years expected customers to abide its lightweight security and heavy-handed licensing, so customers started taking their business to open source and other rivals. Siebel did little to make its CRM packages easier to deploy and use, giving rise to Salesforce.com and, in many ways, the software-as-a-service movement. Intel put customers on a forced march to 64-bit computing, only to get outflanked by Advanced Micro Devices and its more transitional processor architecture.

Then there are the vendors who outright violate their customers' trust. Enron, whose top two execs were convicted last month on various fraud and conspiracy charges, is only the most glaring recent example. Sony, in an attempt to stop pirates from copying its CDs, last year built in "rootkit" code that opened gaping security holes on users' computers. Privacy advocates wailed, lawyers sued, customers walked, and Sony finally got the message. SCO Group went so far as to sue a couple of potential customers in trying to further its ill-conceived strategy of co-opting the rights to Linux. SCO still hasn't gotten the message that sticking it to your customer base isn't a viable long-term strategy. Now telecom, search engine, transportation, and other companies are sharing customer data with various federal agencies. Whether those companies are crossing their customers or just being stand-up citizens is a matter of perspective, but they'd be foolish to underestimate public concerns about such efforts.

But the booby prize for alienating customers, including shareholders, partners, and regulators, has to go to CA. The business software developer has been chronically lacking in almost all the attributes of trustworthiness: openness, customer attentiveness, financial integrity. A couple of weeks after refusing to elaborate on why company CFO Robert Davis had suddenly left the company, CA last week revealed that it would delay filing its fourth-quarter financial results and restate its third-quarter results, largely because of incorrect accounting for sales commissions. Could it be that the two developments are related?

If you're a company that has spent the past several years restating billions of dollars in revenue, paying hundreds of millions of dollars in fines, and saying goodbye to many of your top executives because of criminal and unethical behavior, you owe it to your customers to be open and forthright about your ongoing missteps. Over the past few months, CA's COO, CTO, and CFO--execs once considered key to the company's turnaround--have left. Customers can't be happy that CA chief John Swainson, brought in from IBM 18 months ago, hasn't stepped forward publicly to reassure them that the wheels aren't falling off again.

Swainson blamed this latest accounting screwup on "execution issues," and he vowed (in what is becoming a familiar refrain) to make changes "to ensure that these problems do not recur." On this point, the CA chief can probably relate to the late John McKay, who coached the NFL's Tampa Bay Buccaneers in the 1970s. During the Bucs' notorious 26-game losing streak, a reporter asked McKay about the execution of his team's offensive line, to which he responded: "I'm in favor of it."

Trust is a delicate thing. When you don't cultivate it, you lose it. When you lose it, you're hard pressed to get it back. Perhaps the great starship engineer Montgomery Scott said it best: "Fool me once, shame on you. Fool me twice, shame on me."

Rob Preston,
VP/Editor In Chief
rpreston@cmp.com


To find out more about Rob Preston, please visit his page.

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