The Stairs of Customer Loyalty

by Dr. Tony Alessandra

Many companies follow the same formulas for bringing them closer to what they think their customers really want. Concepts like "customer focus" and "customer satisfaction" are warmly embraced. Today, who isn't focusing on satisfying customers?

However, in today's ultra-competitive marketplace, if you're doing what everybody else is, you'll never get to where you want to be. It is incumbent for companies to set themselves apart from the rest of the competition.

If your company is going to be a leader in your market, you are going to have to really practice things like "customer intimacy", "customer interaction", "customer loyalty" and perhaps more important - "customer partnership".

Partnership is a single-thread relationship.

It is being "one." Such a relationship is built upon a mutually agreed-upon plan that reflects the nature and needs of all parties involved. This is not a re-wording of old terminology or a re-defining of the same, tired concepts of "sales and service". Instead, it is a paradigm shift, moving away from transactional customer satisfaction and towards permanent customer loyalty.

In order to achieve success in the New Economy, your company must develop the needed skills to develop long-term relationships with their best customers. Too often, however, the constant push to increase sales and market share leads companies away from their current customers and, instead, towards finding new ones. Such a strategy is a terrible waste of time and money.

The most effective way to assure the growth in profitability that every company wants is to turn their already-existing customers into "apostles".

For far too many companies today, the overriding focus of their growth strategy is on increasing sales and market share. This is eerily similar to what I experienced when I was working my way through college selling cookware door to door. As a beginning salesperson, I naively believed the best way for me to make more money was to make more sales.

The foolish dedication to this premise led me to ignore my past customers in favor of always finding new ones. It was only afterwards, when I found myself working harder than ever before and making less money for the time I invested, that I realized my strategy was wrong. Unfortunately, many companies today are acting and thinking like I did over thirty years ago. They dedicate far more of their resources to expanding sales at the expense of their already existing clientele.

Since 1974, while working with some of the smartest and most successful companies across America, I have learned that the ability to convert new sales into "apostles" for the company is the best path towards stable, long-term growth. Moreover, I have recognized which skills are needed to accomplish this task.

The stairs of customer loyalty is the process which, in a simple, straightforward manner, shows you how to convert your prospects into sales, and then to customers, and finally, into apostles, who are a group of raving fans who will "preach your message" and "sing your praises" to the marketplace.

Finding the Right Prospects and Avoiding the Wrong Prospects

Possessing the right marketing skills is crucial in properly identifying the right kinds of prospects for a company. Smart companies accomplish this responsibility by profiling the top twenty percent of their current customers who typically provide eighty percent of their profits.

Criteria like profitability, frequency of purchase, after-sales service required, revenue, and loyalty potential are quantified and used as measuring devices in determining the most important characteristics of a company's best, most potentially loyal customers.

Looking for new business is very expensive. Therefore, companies need to avoid the wrong kinds of prospects for them. Just as it is critical in distinguishing the attributes of the right prospects, a company needs to outline the characteristics that make-up the bottom twenty percent of their customer base.

Anybody in business can easily recognize whom the complainers, price-grinders, and transaction-oriented clients are. By clearly understanding the bad traits of those bottom twenty-percent, companies can much easier avoid the wrong prospects and focus their resources on the upper twenty-percent instead.

The "20/80 Rule" works at the bottom of the customer base as well. That is, twenty percent of a company's customers more than likely cost more to handle than they're worth. These customers give more grief; chew up more time with requests and complaints; and, generally, cause the most stress for a company.

The Steps to Successful Sales

When a company is ready to make contact with the right type of prospect, three face-to-face steps are used to move to the next stair, "making the sale". Each step requires particular selling skills that are necessary to "close the sale". A successful sale is like building a pyramid; each step depends upon the success of the previous ones, and no step can be omitted without creating disaster.

Exploring Needs

The exploring step of sales gives you the chance to get deeply involved with your prospects to determine exactly how your product or service can help them. It's where the partnering process begins. The purpose of exploring is to get enough information from the client to enable you to recommend appropriate options. This step is epitomized by the guiding principle of Collaborative Selling, "Prescription before diagnosis is malpractice."

Collaborating Solutions

After you've worked with your prospects to identify needs and concerns, the next step is to determine whether or not your product or service will solve a problem or seize an opportunity for them. Usually there are several different ways you can put your product or service together to meet the needs of your prospects.

The collaborative selling way is much less adversarial and much easier. You actually involve your prospects in deciding which one of your options makes the most sense for them.

Confirming the Sale

If you've done your job properly to this point, your customer should be asking to buy from you. The commitment becomes a how and a when, not an if. Signing the agreement is merely a formality. However, before confirming the sale, you'll want to be sure your prospect has all the information he needs to increase their perceived value of your product or service.

Building Long-Term Customers

Operations-Driven vs. Customer-Driven

Leaders in their industries are always customer-driven, instead of operations-driven. Through the keen application of service skills, smart companies design strategies that assure that customer expectations are consistently identified, managed, and monitored. Then, once these are accomplished, exceeding customer expectations becomes the compelling focus.

Companies that apply the correct service skills create moments of magic for their customers, rather than moments of misery.

Moments of Misery vs. Moments of Magic

Any occasion a customer comes into contact with any aspect of your company is actually of moment of truth for your organization. When the customer encounters a member of your staff, a piece of advertising, or any thing else that can be tied to your company, they formulate opinions, beliefs, impressions, and ideas about who you are and what you're about. These moments of truth normally result in one of three outcomes: a Moment of Misery, a Moment of Mediocrity, or a Moment of Magic.

Customers who consistently have their expectations exceeded - or, receive Moments of Magic - are those who become apostles for your organization.

Converting Customers into Apostles

Exceptionally strong intimacy with the customer characterizes the apostle stair of customer loyalty. Creating apostles should be the highest goal of customer development. Apostles will do more for your organization through their good will and word of mouth than almost any other form of marketing or sales. Smart companies look to double the number of apostles each year by moving prospects, sales, and customers up the stairs of customer loyalty.

Apostle-Driven

Companies that become "Apostle-Driven" are those which do not constantly have to dedicate limited resources of time and money to always finding new customers. Their Apostles accomplish this task for them. Such leading companies, of which there are far too few, are the ones that will dominate their industries now and well into the new century.

The Stairs of Customer Loyalty shows you how to consciously shape a plan for developing your customer relationship skills in a more congruent manner and is a benchmark in fostering and promoting permanent customer relationships for businesses of all sizes. The Stairs of Customer Loyalty helps you recognize the wide range of challenges facing your company today and provides the skills indispensable for overcoming them so you can achieve the critical relationships needed to survive and thrive in the new millennium.

©2000-2003, By Tony Alessandra, Ph.D. All rights reserved, including the right of reproduction in whole or in part in any form, without permission in writing from Dr. Tony Alessandra. For more information about Dr. Alessandra's products and speeches, call his office at 1-800-222-4383 or visit his website at http://www.alessandra.com