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Services Dominant marketing is a new world of business. It forces companies to show authenticity, fairness, transparency and good faith. It is no longer just about performing our jobs well. It is about the human characteristics of our employees and yes, our customers as well.

The world in which we live has undergone rather radical disruptions the past few years. We have seen the financial upheavals in Europe, the Arab Spring overturning long-run governments, riots by labor groups in Greece, demonstrations on Wall Street by upset unemployed and various social groups. The world is undergoing tectonic shifts. We have the loud debate on economics in America between the Keynesian government spending and economic controls to the Austrian School of Economics that wants less government interference in our lives. We have the strident political posturing of all sides in the debate. In fact, we are in the middle of a transformation as significant as the Industrial Revolution.

In the communications world we have seen the arrival and maturation of social media: Facebook and Twitter and Linkedin. In some cases we have seen social media’s raw power most recently in “Arab Spring” uprisings in Egypt. But social media is not just an abstraction to be viewed from a distance; it is right here in our marketplace. This leads us directly to the fact that the control of your business image is shifting if not already shifted. It is your customers and your employees who will be calling the shots. It makes perfect sense that the people most impacted by your business are the main stakeholders in it.

But let’s back up for a minute. Customer defection in our industry for the Service Department runs about 15 percent annually. This has been reflected in the two most recent AED Product Support survey reports. Just remember, if that doesn’t sound too bad to you, consider if that happens for five consecutive years – you will have lost nearly 50 percent of your customers. I understand that you acquire new customers every year but you cannot afford to keep losing customers at this rate. Word like that – a reputation like that – gets around, and now more than ever, word gets around quickly. “Tweets” in business groups are getting to be just as plentiful as they are in social groups. And I am sure you remember this statistic well: One unhappy customer tells between 11 and 15 people, depending on which survey data you support. But it is sizeable. And now it is easier to communicate than ever before. All it takes is a tweet.

But before we get too depressed, we can also use these social network tools in a business network that we ourselves can define and use for our benefit. It can be used to ask for customer input. Now we can become more directly plugged in to the needs and wants of our customers and our employees.

In the Service Profit Chain, which you have heard me reference often, there is a direct correlation between employee satisfaction and customer satisfaction. It only makes sense doesn’t it? The happier your employees are about their work and their ability to service the customer, the happier and more satisfied your customers will be with the level of service they receive from those same employes. So let’s learn to use these new communications tools. But understand that whatever the employees or customers ask for or suggest requires you to act. Otherwise, the customer or employee will become cynical. You have to be open to their suggestions and be ready to act on them. Anything else will be unacceptable. You will have to become vulnerable to the input of your customers and employees.

If you are prepared to be vulnerable to this input your business will thrive because it will be your critical stakeholders who are driving the changes. We will be exploring social media much more directly in 2012, so that we can all learn how to take advantage of this growing influential tool in our society.

To each of you, I hope you enjoy this wonderful family time of year and give yourself permission to reflect on all the joys of the past year and this wondrous season. There is much to be thankful for this year and much to look forward to next year. There have been challenges and at the same time wonderful new opportunities pop up. Remember the Chinese curse: “May you live in interesting times.” Well, these times sure are interesting. I wish you a healthy, happy and prosperous 2012. Happy New Year!