I recently paid a visit to my auto insurance agent. I had to sign some papers and I was in the neighborhood, so I drove in to see good ol’ Jack.

Jack is a great guy, pushing 70, deep scraggly voice that frightens children. I said hello to his two long-time assistants and sat down at Jack’s desk, ready to get down to business.

But the world is changing, the neighborhood is changing, and loyalty is a hard thing to win these days. Customers demand more, have more options, and have less patience. Companies are pressed to find ways to make the customer experience a positive one, and to do it on a grand scale.

“Now, what can I do for you?” said Jack, his voice scraping against his throat.

“You called and told me I needed to sign some papers,” I replied patiently.

“Oh,” he lobbed back over the 30-inch stack of documents on his desk. “Well, let’s see what this is all about.”

He stood up and lumbered to a huge file cabinet.

“Where’s the Valenty file?” he shouted across the room to no one in particular.

“I don’t think it’s in there,” a woman’s voice countered. “Think I may have seen it on your desk a few days ago.”

“Is that right?” Jack grunted, and walked back toward his desk with its mountain of files, folders, and faxes.

For the next one-third of an hour, three people searched, shouted, and scratched their heads. Finally, I had to say it:

“Don’t you have a CRM software program running your customer database?”

I waited for a reaction, not sure I’d get one. (People tend to ignore young snobs who speak in acronyms. By the way, CRM stands for Customer Relationship Management; Jack never asked.)

“We have a fax machine,” said Jack proudly.

“I think he’s referring to a computer when he uses the word ’database’,” said assistant number one. “We have an iMac—use it to play solitaire during my breaks. I used to use it to write letters, but I can’t figure out how to change the ribbon.”

“Just put a new ink box in the fax machine, ain’t got no ribbon. Maybe it works the same way,” added Jack through the gravel in his mouth, anxious for me to recognize his proximity to the cutting edge of technology.

I sat mesmerized, partly amused by the sight of it all, but also painfully aware that I was witnessing a business on the edge of its deathbed. After a twenty-minute search, they found my file under a pile of other files on Jack’s desk. I signed and was off.

“I’ll F-A-X you a copy of the rider when I get it from the insurance company,” he hollered as I walked out, emphasizing and stretching the word “fax” as if to assure his place in my inner circle of technological hipsters.

Relationships are Crucial—and Not Enough

The experience confimed for me the absolute necessity of effective business software, and reinforced my commitment to build affordable solutions for small businesses.

It also brought to light the frustration of the education process—trying to explain the value of innovation to someone who doesn’t know what they don’t know. Jack is so far gone that I never went any further; it would be like trying to explain the significance of a Pentium Processor to General George Washington.

Counting the trip back and forth, I had invested close to an hour of my busy day—a block of time worth at least a month’s worth of premiums. But I didn’t mind—because I like Jack.

Jack’s business will die with him—but because of his ability to forge long-term relationships, it won’t die before him. He is a wonderful guy, an old school businessman who made it all these years by being a fixture in his neighborhood, knowing his customers personally, hanging out with them socially, and earning his commissions. In many cases people will pay more for such personal service—misplaced files notwithstanding.

But the world is changing, the neighborhood is changing, people can buy auto insurance over the phone or online quickly and less expensively, and loyalty is a hard thing to win these days. Customers demand more, have more options, and have less patience. Companies are pressed to find ways to make the customer experience a positive one, and to do it on a grand scale.

Jack did build strong relationships—but if he used modern methods, he could have created a big operation that would survive into posterity. To reach high levels of success, the relationship is not enough.

If he were not so poorly organized, if his business were not so dependent on him, then he would have a business that could be ten times larger, yet more manageable with less time investment, leaving him to enjoy his golden years more than he is.

And because his customer relationships are with him and not his company (I certainly wouldn’t drive out there to see anyone but him), and because he is more expensive than the alternatives, there is little doubt that all he built will scatter with the wind when he is no longer in the picture.

Technology is Crucial—and Not Enough

As a network marketer, I relied on systems that I developed, rooted in technology, because I was not like Jack. It is hard to build personal relationships over the phone from a distance. It is hard to win trust. I used the technology in real-life situations, enjoyed success, and formed a company dedicated to building business software to help others like me.

There is no honor inadmitting that you are unaware and unwilling to change with the times, to learn business principles and tactics that all serious players across the business world are spending millions of dollars to implement.

Consequently, people know me as “the tech guy” or “systems guy.” While I suppose those labels are warranted, they are incomplete: it’s not as if I have devoted myself exclusively to technology, at the expense of human relationships.

And therein lies the point.

Many of the “big” network marketers I talk to remind me of Jack. I often hear them say, “John, I built it the old-fashioned way. Now, I’m not a technology guy, John—heck, I don’t even know how to turn the darn computer on!” This is typically followed by a few “ha-ha-has” and is delivered in a way that, I must admit, really irks me.

There is no honor in admitting that you are unaware and unwilling to change with the times, to learn business principles and tactics that all serious players across the business world are spending millions of dollars to implement. Especially when those technological aspects only serve to amplify the successful non-technological principles that got you there in the first place. What if implementing effective technologies could increase the productivity of downline members that don’t possess strong personalities and follow-up skills to foster strong relationships?

On the other side of the coin, we’ve seen quite a few “big-networkers” who in the past few years had developed very large technology-driven organizations—and very large checks—in a very short time… only to find their companies and matrixes crashing and burning around them. In many cases, such short-term high rollers have met with a harsh reality: they didn’t know anyone in their organizations, they had no customers (heck, they had no products), and they built no lasting relationships to carry into the next endeavor.

Incomplete technologies and impersonal automation has tilted their businesses too far in the other direction. Technology is not enough.

Technology Systems + Relationship Skills = Unlimited Success

Throughout the entire dot-com craze I have maintained that technology and systems are designed to do one thing: to create more opportunities to build valuable, long-term, business relationships.

I found a quote from the Peppers and Rogers revolutionary marketing classic, The One To One Future, that says it better than I can:

“Technology has brought us back to an old-fashioned way of doing business by making it possible to remember individual relationships with customers—sometimes millions of them—one at a time, just as shop owners and craftspeople did with their few hundred customers 150 years ago.”

It is not relationship versus technology, but rather a synergistic blending of technology applications along with interpersonal skills and techniques to effectively cultivate large numbers of relationships simultaneously.

That is what systems today are capable of accomplishing—and I’ll write more about that soon.

Right now, I am going to see Mr. Wong, my dry cleaner. I’m missing a pair of pants.

John Valenty is founder of Earnware
a company that creates technology solutions for small businesses.