Many companies follow the same formulas for bringing them close 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 are doing what everybody else is, you will 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 singlethread 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 today’s 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”. Unfortunately, many companies today 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. The stairs of customer loyalty is the process by which you convert your prospects into sales, and then to customers, and finally, into apostles, 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 who 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 are worth. These customers give more grief; chew up more time with requests and complaints; and, generally, cause the most stress for a company.
Read the entire article, The Stairs of Customer Loyalty featured in Top Sales World Magazine, November 2015.
Dr. Tony Alessandra is a behavioral and communication expert and the CEO of Assessments24x7. He has authored 29 books including The Platinum Rule, Collaborative Selling and The Art of Managing People. Today he is a leading business speaker on communication, customer loyalty and sales.
