20 Jun How To Build Customer Loyalty
Do you know why your customers are loyal? (Hint: it’s not price)
For their book, The Challenger Sale, authors Matthew Dixon and Brent Adamson carried out extensive research, interviewing thousands of company buyers to try and discover their process for choosing suppliers.
Some of the results weren’t too surprising – company and brand impact as well as product and service delivery were both important criteria for buyers. What was unexpected was that these two aspects combined only accounted for 38% of customer loyalty. Even more surprisingly, value to price ratio – how much those products and services actually cost – was a primary concern for only 9% of buyers.
The remaining 53% of the buyers were loyal to their suppliers because of one thing – a great sales experience. The US automotive data and research company POLK says when buying a car, this so-called “sales experience” accounts for even more of the buying decision, as much as 60%, while the price accounts for only 5%.
So while your brand, your product and your service do have a place in winning customer loyalty, it’s not a big place. The most important factor in loyalty is your buying experience: if it’s below par, so will be your customer loyalty.
Interestingly, the buyers who were interviewed for “The Challenger Sale” placed the most importance on the ways that salespeople make their lives easier. Here are the four key ways that customers like to be helped:
1. Navigating alternatives – buyers appreciate the seller’s expertise of options in the marketplace and when they share that expertise, loyalty increases.
2. Providing ongoing advice – helping the buyers long after they sign on the dotted line.
3. Helping the buyer to avoid potential landmines – if your sales team keeps the buyer free of troubles, they’re going to stick with you.
4. Being easy to buy from – oddly enough, many companies get this wrong. Make it easy for the shopper to buy from you: make your offerings easy to understand, keep your terms simple, be sure your delivery is prompt, and your customers will love you for it.
If your sales team can make the buyer’s life easier, loyalty is almost guaranteed.
Of course, this research is all about keeping existing customers loyal. But what if someone isn’t already a customer of yours, how are they supposed to know that your sales experience is so much better than your competitors?
Here’s an idea – have your current customers talk about how wonderful your buying experience. Get them waxing lyrical about how you helped them avoid potential pitfalls, offered up a bunch of alternatives and kept them abreast of new and relevant innovations. Have them talk about how essential your company is to their ongoing success.
Get it all on film, cut the footage into a short and persuasive video, and get it out there: post it on YouTube and Google, put it on your website, play it at trade shows, use it for email marketing and in face-to-face sales presentations.
When prospective buyers see how you’ve made your present customers’ lives so much easier, they’ll not only sign up with your company, they’ll remain loyal for a very long time.