Let’s deal with this myth first - there is no ‘real’ customer loyalty in today’s global economy! When we stopped giving service people started looking more at the price. People go where they get the best deal (meaning the best value for their money.) Just because your customer purchased from you once, don’t be deluded into thinking that they will ‘automatically’ buy from you a second or third time.
So how do you keep your customers coming back time and again? To answer this important question you need to take a moment and think about what would keep a customer coming back to a business. Three instances or relationships come to mind.
Three Basic Customer Relationships:
The Customer has a Positive Relationship with the Business In this case, the customer has formed a positive relationship with a person (yourself) who works for the business or with the business itself. Perhaps they had a great experience and they now have an emotional bond with the business. Unfortunately, unless the emotional bond is nurtured, it dies a fast death. Sadly, there are few businesses that nurture their relationships with their customers.
The Customer has ‘Incentives’ to Continue the Business Relationship
People are human and because of that we are naturally wanting more (greedy, if you will). Companies who reward (bribe) their customers with coupons, points, credits, and bonuses create an incentive-based relationship that can crumble if the incentive is taken away or met by another competitor.
The Customer “Has” to Maintain the Relationship, as the Cost to Change is Prohibitive
In this instance, the business has tied or integrated it’s operations into the customer’s life or business so closely, that to change to another product or service provider would cause damage operationally, emotionally, socially, or financially. An example of this type of relationship might be a person who is emotionally dependent on his therapist (emotional) or a customer who uses your software to run their business (operational). For example using one of the Microsoft products and having trained yourself and your software to maximize your effectiveness.
This third type of relationship can be called a “Symbiotic Long-term Relationship” because it extends or integrates into the life of a person or into the operations of a business. Of the four basic types of Symbiotic Relationships (operational, emotional, social or financial), the operational relationship is the most powerful. Operational relationships exist when the actual work processes of two businesses overlap or boundaries between them merge or blend.
Each of the three types of relationships keeps customers coming back, but the first two are easier to break. The Symbiotic Relationship, has severe perceived and real penalties for breaking the relationship and; therefore, encourages the customer to come back repeatedly whether they like it or not. This is the ‘ultimate’ customer relationship and a key to profitably generating repeat sales. If you blend this with real concern and customer care this can be a long-term winner.
Investigate most highly successful companies and you’ll find that most have developed Symbiotic Relationships with their customers. Here are two great examples of companies that have created profitable Symbiotic Relationships.
FedEx FedEx installs computer terminals in many of their customer’s businesses that help to determine shipping requirements, track shipments, and even integrates into the customer’s inventory, accounting and order management system to automate the returns process. This literally forces the customer to use FedEx for their express mailing needs. This is supported by their performance and commitment to 100% satisfaction. When you think that they process 2.5 million packages each day, this commitment is staggering. But if you had 20 people dealing with a package and each did so with only 98% efficiency, the result would be only a 67% accuracy. No wonder they have invested so heavily in IT and a hard commitment to this level of accuracy and customer satisfaction.
Campbell Soup Campbell’s Soup has developed a successful vendor-managed inventory (VMI) program with its customers. A VMI program provides continuous replenishment for its customers by monitoring the customer’s inventory levels (physically or via electronic messaging) and makes periodic re-supply decisions regarding order quantities, shipping, and timing. In effect, Campbell Soup has literally taken over the entire replenishment function for its customers. And their customers love them for it. Just think, if you are in the grocery business and your margins are low (they are) and you are dependent on volume to create profit; any way that you can cut back on the time investment dramatically increases that margin. In providing a service Campbell Soup is creating a mutually beneficial long-term relationship.
Conclusion Take some time to brainstorm how you can create Symbiotic Long-term Relationships in your business. Think about how you can extend your products or services “into” your customer’s business so that their cost to change to another provider is overwhelming. Remember, the most powerful relationship is one in which you and your customer’s business processes are intertwined.
Ask Yourself Some Questions - in each of the four areas of Symbiotic Relationships. Your answers will help give you ideas about what you can do to create or enhance a Symbiotic Long-term Relationship with your customer.
Operational • Do you have a technology or system or service that you can integrate into your customer’s business? One that would meet their needs and truly assist them?
• Can you take over or manage a portion of your customer’s business operations to free them up for more productive activities, or to save them money in their operations or staffing expenses?
• Can you house or manage your customer’s data or assets at your place of business?
Emotional • Can you attract, recruit or hire influential people in your industry (i.e. recognized industry experts, high-level executives in big companies, popular service professions) that already have very close relationships with target customers? This can open the door for long-term activity.
• Can you provide your customer with so much support (i.e. advice, attention, help) that they can’t do without you? They wouldn’t want to!
• Can you align your product or service with that of an existing, highly popular product or service? Does this enhance the effectiveness of both products and services and give the customer better service or results.
Social • Can you get your customer to be a public booster, fan or champion (i.e. provide a public testimonial) for your business?
• Can you create or promote a brand so “cool” or popular, that to not use it would be almost embarrassing, to say nothing of expensive in lost sales and customers?
• Can you create and present an award to recognize your biggest customer(s) (or target prospect) and announce it to the industry?
Financial • Can you offer a process-based program that requires a large upfront investment that effectively delivers products or services over time?
• Can you offer your significant customers an opportunity to financially invest in your business?
• Can you lock your customer into a long-term contract with penalties (negative incentives) attached for breaking the relationship?
Good selling!
© Copyright 2006 Bob ‘Idea Man’ Hooey www.ideaman.net All rights Reserved. Used with permission of the author. Excerpt from Bob’s new Book ‘Thinking Beyond the FIRST Sale.’ (due out fall 2004)
Bob ‘Idea Man’ Hooey is a productivity strategist and creativity catalyst who regularly writes for North American Consumer and Trade Journals, on-line magazines and company intranets. He is the author of 9 books and the 48th person in the history of Toastmasters International to earn their coveted professional level Accredited Speaker designation. He is a professional member of the Canadian Association of Professional Speakers and the International Federation for Professional Speakers. Visit his website for additional articles like this one: www.ideaman.net
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Bob Hooey
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Canadian Ideaman, Bob Hooey is an
acknowledged expert who will equip and
motivate your leadership and employees to
grow and win!
Bob is the author of 10 business,
leadership and career building books
including two on sales. He is a frequent
contributor and columnist for North
American consumer, corporate, association,
on-line trade publications on diverse
topics, eg: productivity, creativity and
innovation, leadership, teamwork, sales,
management, training, motivation, customer
service, and more.
He is an award winning speaker, becoming
(1998) only the 48th person worldwide to
earn Toastmasters coveted professional
level Accredited Speaker designation. He
has been inducted into their hall of fame
on several occasions. Bob is a founding
professional member of CAPS Vancouver,
honorary member of CAPS Sask & Halifax and
served as a CAPS National Director. He has
earned the respect of clients and
colleagues alike for his professionalism
and dedication to service and increased
value. Call now to engage him.
1-888-848-8407 (toll free North America).
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I had a journalist ask me the other day to define the difference between sales and marketing for the typical entrepreneur.
