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 today’s hyper-competitive economy, your company must develop the needed skills to develop long-term relationships with its best customers. Too often, however, the constant push to increase sales and market share from new business 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. As a beginning salesperson, I naively believed the best way for me to make more money was to make more new 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 forty years ago. They dedicate far more of their resources to expanding new sales at the expense of their already existing customer base.
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 repeat 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 Ones
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’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 collaborative 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
In this stage of the collaborative sales process, salespeople convey the message: “Let’s explore your business situation to see if there are needs to fulfill or opportunities on which to capitalize.”
During the explore stage, collaborative salespeople conduct research, meet with their prospects frequently, and do whatever it takes to become an expert on their prospect’s business. The give-and-take relationship that develops sets the stage for in-depth exploration of options that may culminate in a sale. Collaborative salespeople make it clear that they want to help, not just make a sale. If, after information-gathering, collaborative salespeople find that their products are not appropriate for their prospects, which is unlikely due to their careful target marketing, they will forego the sale, but have made a friend and business contact. The explore stage of selling, and in fact the entire Collaborative Selling philosophy, is built around the following phrase–“Prescription Before Diagnosis is Malpractice”
Collaborating Solutions
It is at this point, after an in-depth exploration of a prospect’s situation, that collaborative salespeople talk about their products or services. Naturally, they are discussed in the context of prospects’ needs or opportunities.
Collaborative salespeople never dictate solutions to their prospects. Instead, they form “partnerships” in which prospects play an active role in the search for the best solution. The collaborate phase of the sale is conducted in the spirit of “let’s work together on the solution and together build a commitment to its successful implementation.” This team-approach to problem solving ensures that prospects will be committed to solutions. By making customers equal partners in problem solving, collaborative selling reduces or eliminates the risk that is inherent in the customer’s decision-making process.
Confirming the Sale
Keep in mind that, in every phase of the collaborative selling process, the salesperson and prospect have communicated well. Collaborative salespeople move on to the next phase of the sales process only after they have received assurances that their customers are in agreement with them on everything that has been discussed.
This agree-as-you-go process eliminates the need to “close” the sale or handle objections. Most objections have surfaced long before this point. If resistance does occur, the salesperson simply gathers more information or clarifies a detail.
With collaborative selling, the sale is a matter of when and not if. Confirming the sale is the logical conclusion to an on-going communication and problem-solving process. There is no need to “close” them. People commit when all their buying criteria are met!
Building Long-Term Customers
Operations-Driven vs. Customer-Driven
As a customer in today’s market place, what impresses you the most? What prompts you to more often return to a particular store rather than “shop around?” You, like most others in both their business and private lives, are no longer always shopping for the lowest cost-you are looking for what gives you the greatest value. When you find that value, you return again and again and again. What is it that gives a retail store or other business a greater value over its competitors? It’s their customer-driven orientation.
A business can be classified as either customer-driven or operations-driven. It either attempts to serve primarily the customer, thus being customer-driven, or it primarily serves itself, thus being operations-driven.
The operations-driven business tends to be internally focused, always looking inside their business for ways to make things easier for the employees. This type of business creates systems and procedures to protect themselves from the outside world. The customer-driven business, on the other hand, is externally focused, always looking for ways to make things easier for its customers. Such a business creates policies and procedures that are advantageous or friendly to its customers.
The operations-driven mentality is “How can we sell something?” and thus uses a product/feature focus. The customer-driven mentality, on the other hand, is “How can we help people?” using instead a customer/benefit focus.
Operations-driven employees seem to say, “If it weren’t for all of these customers, we could get our job done!” In contrast, the customer-driven employees seem to say, “If it weren’t for our customers, we wouldn’t have a job!”
Operations-driven companies have their eye solely on the bottom line, while customer-driven companies keep an eye on the customer.
In an economic downturn, it is the customer-driven business that survives. Why? Because it looks at how it can create a competitive advantage and uniqueness so that people will want to do business with them. It knows that people will be willing to pay more for goods or services if they are getting more value. In contrast, the operations-driven business focuses on what costs can be cut. As the company slashes and cuts, service declines. The market then responds with less business. As business goes down, so do the revenues.
Understanding these basic differences between an operations-driven and a customer-driven business is essential if a positive change toward customer-driven service is to be made.
Moments of Magic
In 1981, Jan Carlzon took over as chairman of one of Europe’s most poorly rated airlines, Scandinavian Airline Systems (SAS). Carlzon quickly implemented many changes, the most important of which was to manage the interactions that SAS employees had with its customers. In 1987, he wrote a book entitled, Moments of Truth, in which he said, “Last year, each of our 10 million customers came in contact with approximately five SAS employees, and this contact lasted an average of 15 seconds each time. Thus, SAS is ‘created’ in the minds of our customers 50 million times a year, 15 seconds at a time. These 50 million ‘moments of truth’ are the moments that ultimately determine whether SAS will succeed or fail as a company.”
Every single contact between any employee and a customer is an important contact, regardless of its length or content. How are moments of magic consistently achieved? The bottom-line answer is that a company has to be customer-driven versus operations-driven, where it puts the needs of its customers first. An operations-driven company puts its needs, policies, and procedures first. A customer-driven company may bend its own rules to please its customers. An operations-driven company uses its policy manual as its Bible and will, if necessary, disappoint customers by invoking the most ignorant excuse on the face of the earth: “I’m sorry, it’s against company policy.”
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. These skills are indispensable for overcoming internal challenges, so you can achieve the critical relationships needed to survive and thrive in the new millennium.
_____________________________________________________________________
Dr. Tony Alessandra has authored 14 books translated into 11 languages, recorded over 50 audio and video programs, and delivered thousands of keynote presentations since 1976. He’s an expert on customer loyalty, collaborative selling, and adapting to different behavior styles.
