Maters of Loyalty
Introduction – How we get ‘customer loyalty’ wrong.
Like any business owner, I shop among various vendors for most of the goods and services my company needs. Salespeople who can offer higher quality, better service, or a lower price often find me a willing listener—at least until they, themselves, do too little listening and too much talking.
But in one area where my company relies on outside help, I am loyal to a particular supplier. By “loyal” I don’t just mean that I’m satisfied with this vendor or that I have no complaints. I mean that I have stopped shopping. I can’t imagine an offer from one of this supplier’s competitors that would tempt me away. The relationship that I enjoy with the firm is too valuable, to me and to my company, for me to consider giving it up.
This vendor does good work at competitive prices—that’s a given. But I’m sure that, if I cared to look, I could find a lower price. I could probably find quality and services that looked as good, too, at least on paper. I don’t care. It’s the relationship that has had me stuck like glue for 15 years and counting.
Now, here’s a point that gets missed in almost all discussions about things that companies can do to build loyal, lasting relationships with their customers: As with every truly powerful relationship that you or I have ever had, this one is not actually with a corporate entity. It’s with a person. Specifically, a salesperson. His company just reaps the benefits.
My guy won a small piece of my business in his specialty area 15 years ago. Soon he had all of it. He is deep into my company with his relationships; he knows all of my key people, regardless of their positions on the organization chart. He knows my wife, my children, my best friends—and I know his. He knows my business as well as any employee I have. We have solved a lot of problems together.
If I create a new product, he is involved in the strategy as well as in the design and execution. I have learned that I avoid a thousand headaches if I rely on him not just as a supplier but as a business partner. He is as complete a “solution” as I could wish.
His name is Kevin Mergens. His business happens to be printing. In addition to being his own best salesperson, Kevin is the owner of Absolute Print Graphics in Minneapolis. His company printed this book. He helped to edit it, too, though that role isn’t in his job description. If he learned to write books, I wouldn’t even need me.
Satisfaction vs. Loyalty
When companies say they want more loyal customers, they mean they want customers who give the company a greater share of their business over a longer period of time. Organizations spend a great deal of time and energy on efforts to persuade customers to become loyal.
Those efforts often take the form of loyalty programs that provide incentives for repeat business. Examples in the business-to-consumer world include airline frequent-flyer programs and the discount cards offered by retailers such as booksellers, grocery stores, and pet-supply outlets.
In the business-to-business (B2B) world, loyalty programs aim to encourage large-volume or long-term buying by offering bulk discounts and/or special packages of services or technology for major (or at least steady) clients. In any case, the point of loyalty programs is to make the sponsoring company the customer’s supplier of first choice.
Here’s the trouble with loyalty programs: Like most products and services today, they have become commodities, easily copied by competitors. Launch a brilliant new loyalty program that begins taking business away from your competitors, and they will match it in a matter of months—if not weeks or days.
Customers will be attracted to your loyalty program, and satisfied by it, only until they are wooed away by another program. And, loyalty program or no, you are their “supplier of first choice” only until the next choice appears. Try opening a trendy new restaurant that will remain trendy for longer than a year or two.
Products, services, programs, policies, and procedures—things your company does in the name of building loyalty—can be important. But even the best company-level initiatives create only satisfaction, not real loyalty. They leave you vulnerable to competitors.
“Satisfaction” won’t cut it. True loyalty does not exist until a customer has stopped shopping, as I have for my printing needs, and is highly resistant to your competitors’ appeals. Unless you are Harley-Davidson, and your customers tattoo your corporate logo on their bodies, your products or your brand won’t generate that kind of loyalty. Neither will your programs or other corporate-level initiatives. This is especially true in the B2B world, where rewards programs do practically nothing to keep customers from leaving.
What’s wrong with customers who are merely satisfied? Just this, as research shows:
- 75% of customers who leave a company for a competitor say they were satisfied or even “very satisfied” with the company they left.
- Only 25% of customers who defect from a company say they left for a lower price—but 50% of salespeople think that’s why their customers defect.
- Only 10% of customers leave because their needs have changed. Salespeople think a full third of their clients leave for that reason.
- 75% of customers actually leave a supplier because of the lack of a solid sales relationship. But only 20% tell the salesperson that this is why they’re leaving.
Source: The Sales Board, Inc.
From sales force to loyalty force
That last statistic suggests why loyalty programs appeal to the wrong causes of customer defections. It also suggests where the answer really lies for companies that want customers who are loyal in the most valuable sense of the word—customers who have stopped shopping and are deaf to competitors’ appeals. When it comes to generating real loyalty, a company’s greatest asset is the potential of its sales force.
People won’t go deaf to a company’s competitors. They will go deaf to the competitors of another person. Think about it. Have you ever felt so loyal to a supplier that you stopped shopping? If so, what made you feel that way? Was it really the company? Or was it a person?
Any customers, but especially B2B clients, are most apt to become loyal when they have developed a bond with a particular kind of salesperson. This kind of salesperson acts as a consultant, an orchestrator of resources and, above all, a relationship builder.
Salespeople who are skilled at generating loyalty understand that loyalty itself must be earned and sold. Those in B2B situations market not just their companies and their products but themselves to the client’s entire enterprise. They don’t fall into the trap of thinking that the ultimate decision maker (the person with budget authority) is the only buyer who counts and that the rest of those folks—product users, technical specialists, other influencers—are merely obstacles in their path as they rush to gain the decision maker’s ear.
A company with 100 Kevin Mergens in it would rule the world. But he is a rarity. Why? Because the vast majority of salespeople don’t act as loyalty generators. They don’t understand that the underlying purpose of every client call should be to sell loyalty by strengthening their personal relationship with the client. And even if that idea makes sense to them, they don’t know how to do it.
That’s why I wrote this book.
Even during a “successful” sales call, the needle is always moving one way or the other.
Masters of Loyalty
Most salespeople define a successful call as one in which the customer is satisfied with the dialogue or the presentation, and therefore buys something—or at least agrees to take some positive action. Suppose they raised their sights and their definition of success?
The Loyalty Generator diagram represents a gauge of the direction in which the salesperson’s relationship with the customer is moving during the course of every sales call. It applies even to “successful” calls, because if the customer isn’t at least satisfied, the call fails.
To the degree that the needle moves toward “loyal,” the concept of a successful sales call takes on new and greater meaning. The customer is not only buying but becoming immunized against the salesperson’s competitors. The customer is deciding to stop shopping.
I said above that most salespeople don’t understand that the underlying purpose of every call should be to sell loyalty. This applies even to many of those who have been trained in Action Selling, which I believe is the best system yet devised for selling not just products or services, but loyalty. (Yes, I’m biased.)
The numbered gears in the Loyalty Generator diagram represent the nine Acts of Action Selling. Their size represents their relative importance in selling loyalty. A genuinely loyal customer is the goal Action Selling is the manual that tells you how to achieve that goal.
Some salespeople grasp intuitively that Action Selling is not only a sales system but a loyalty-generation system. They become blackbelts, operating at a master’s level. Others don’t quite get it. Their sales performance may improve dramatically, but they do not reach their full potential as loyalty generators. And their companies don’t reap the full benefits of that potential.
In my previous books, I have described the Action Selling system, how it works to lift the game beyond the trap of price competition, and why questioning skills are so vital to success. In this book, I have attempted to describe what selling looks and feels like at the black-belt level…the master’s level…the loyalty-generation level.
In a master’s-level sales call, you can actually see loyalty happen. Capturing that look and feel was my major goal. Action Selling itself is explained only to the extent necessary to show how loyalty can be built in a systematic, replicable way.
You also will find a sub-theme that is especially important to sales managers and executives. Loyalty is multidimensional. Salespeople are much better at selling loyalty to customers when they feel loyalty to their own companies.
Like my previous books, this one tells a story. It’s a story about Mike, a marketing vice president who has a problem your organization just might share, and Tony, a salesperson who has the solution. The complication: Because Tony is a master, he can’t understand why others have the problem. That makes it tough for him to communicate the answer.
Does Tony succeed in getting the message across? That’s for you to decide. For your sake, and your company’s, I hope so.
Here’s to real customer loyalty. Good Action Selling!