The best ways to save at-risk customers and boost loyalty

Warning: Satisfied customers leave, too. In fact, 80% of customers who switched to a competitor were satisfied with their existing supplier at the time. But increasing customer loyalty with these at-risk customers is possible with the right follow-up program in place.

It stars by finding out why a customer plans to leave.

Four key reasons why customers leave:

1. Problems sour the relationship. Although initially satisfied with the purchase, unresolved problems develop in the relationship. Suspicion that there will always be problems may block the opportunity for repeat business.
2. Poor follow-up. The same salesperson who spends months or even years pursuing new customers fails to ensure that orders are processed and fulfilled in a satisfactory manner.
3. Communication breaks down between the customer and salesperson. Once the sale is made, some salespeople turn the servicing function over to others within their company. As communications with the customer weaken, the salesperson is at risk for losing future sales. In addition, when original decision-makers leave and new ones take over, the salesperson becomes more vulnerable to competition.
4. Easy return. Customers know that if they switch suppliers, their former supplier will invite them back with open arms at any time.

Early identification

Identifying at-risk customers early in the process is essential, if they are to be salvaged. Improving customer loyalty begins with anticipation. You can never know too soon that the customer may be thinking of replacing you with a competitor.

Some early signs a customer is thinking of leaving:

• Hard to get a hold of. Is the customer more difficult to reach, either by phone or a sales call?
• Orders are decreasing. Have purchase orders suddenly decreased?

Trust your instincts when things are not going right. Customers won’t tell you early in the process, because they want to make a smooth transition to the new supplier. Note their body language or tone of voice when you communicate with them.

Above all else, make no excuses. Don’t label the customer as “disloyal” or blame external factors for putting the customer at risk. Accept responsibility that you are responsible for the possible loss of the account.

Uninstalling your competitor

Here are two strategies that may help you de-install a competitor:

• Take the competition on head-to-head. Try to come up with superiority in certain key areas.
• Create slippery footing beneath your competitor at the eleventh hour. This is often the most effective strategy, but it takes timing and knowledge. Study your competitor closely and look for any dissatisfaction by your customer. Find weaknesses and exploit them.

Keys to developing customer loyalty

Retaining customers is more critical than ever because of changes in buying patterns. There is less brand and vendor loyalty than in the past and customers are shopping around for the bottom line.

Loyalty is no longer just a matter of being on great terms with the customer or overcoming objections. More than ever, it’s a matter of trust. Accurately weighing the pros and cons of your product or service for the customer creates confidence. Not trying to hide limitations and refusing to overstate benefits sends the message that a salesperson can be trusted.

This is what professional salespeople have been doing all along. They know that integrity is their greatest asset. In today’s market, it’s vital that salespeople adopt the same approach.

Demonstrate to your customers that you’re their ally in what you do as well as what you say. These simple strategies will encourage present customers to keep coming back for more:

• Don’t just talk with the customer — communicate. Selling is generally based on lots of talk but little communication. Good selling is proactive. It focuses on exactly what the customer wants and when. It does this by communicating the message in ways that are acceptable to the customer. They don’t need more lunches or golf outings: They need salespeople who can anticipate their requirements.
• Sell the customer, not the product or service. Some salespeople tend to be so intent on what they want to accomplish that they fail to focus on what motivates the customer’s buying decision. Customers know when a proposal reflects their needs, and when one is little more than an attempt to go for the jugular.
• Don’t dismiss customers too early. It’s easy to place customers in the “non-buyer” category when you don’t see reorders coming in. It’s normal to qualify customers in terms of their need for your products or services and their ability to become repeat customers. It’s not easy to determine who will become a repeat customer and who won’t. Every salesperson has dismissed customers as one-time buyers only to be surprised when they turned into repeat customers. The best idea is to assume that every customer is a candidate to become a repeat buyer.
• Become a valuable resource by understanding and interpreting your customer’s needs. The way to win a repeat customer is to show that you know who they are, what they do, and the challenges they’re facing. This puts you in the customer’s shoes. It also follows that if you’re on track with analyzing a customer’s needs, the solution you propose will be too.
• Let your customers know why they’re smart to continue to do business with you. Customers want to feel that they have made a good decision when they choose you and your products or services. Your most important continuing task is to reinforce that decision. If you do, they will become loyal customers. Constant communication indicates that you care about those who have chosen to do business with you.

Know what your customers value

Do you think you can name the items your customers value most highly, the ones that motivate them to make buying decisions? Would you list the same values as your customers, sales manager or members of your executive team?

Chances are you would find little agreement among your customers or company executives, according to a recent survey by Smart Advantage, Inc. Fewer than 10% of the respondents listed the same values.

The different internal opinions reflect who is voting and how they see their own job. Salespeople listed “post-sales support” or “knowledge of sales staff” as most important. Sales managers listed “skills of the sales staff,” while other executives pinpointed “product quality,” “pricing” or “on-time delivery” as most critical.

The survey also asked customers to name the values that prompted them to buy. Fewer than 2% of the salespeople were able to pinpoint the values customers listed as critical. If salespeople and company executives don’t understand prospects’ buying needs, they may react according to their individual beliefs.

The problem occurs because companies don’t actually know what their customers’ top priorities are so they guess. When key staff members don’t agree as to what customers want, growth and profitability may be hurt. Getting everyone on the same page with customers may bring rewards in the form of ongoing growth and profitability.

Measuring customer values

Measuring customer values depends on your ability to think from the customer’s point of view — understanding and responding to the customer’s agenda and best interests. Value diagnostic salespeople are willing to adapt to a customer’s change of agenda almost twice as often as their moderately-performing counterparts.

They recognize that thinking like a salesperson places the focus on what they want to sell, while thinking like a customer means getting in tune with what the customer needs and aligning product or service to fit the customer’s requirements.

You’re the key

You don’t write policy or serve on your company’s board of director’s. But no one is in a better position than you when it comes to finding out what customer’s value. Your executive team doesn’t meet with customers or make cold calls on prospects. Any feedback they get from customers will usually come through you.

Why us?

You should be able to ask and answer the “Why us?” question from every customer. The responses should be based on what customers’ value, not on internal guesses. The only way to establish your customers’ buying criteria is to ask them.

The communication mind-set that enables salespeople to pinpoint values that customers rate most highly is called Value Diagnosis. Here’s what makes Value Diagnosis so valuable:

• Customer focus. Diagnosis is about the symptoms the customer is experiencing and the solutions that best address those symptoms. If you’re diagnosing properly, you aren’t talking about your company, your solutions or yourself.
• Collaboration. Instead of a one-sided presentation, you and your customer are taking a journey of discovery and reaching conclusions together.
• Solutions, not blame. It’s about the observable symptoms of problems and the parameters of solutions, not blame. Diagnosis maintains and protects the customer’s self-esteem.
• Promotes ownership. When customers collaborate, solving their problems and developing solution alternatives may lead to long-term relationships.
• Differentiation. The salesperson who takes an advisory-based approach to identify and confirm value may stand out from the pack.
• Diagnostic map. The best salespeople operate like a skilled physician with a diagnostic map in mind. As an anatomical map connects all the organs and body parts into a working system, the diagnostic map enables sales professionals to know where they and their customers are located, and how they’re measuring value at all times.

Connect the dots

Creating value with customers is like helping them work a connect-the-dots puzzle. The value of your solutions is rarely obvious to the customer. It’s your job to help the customer connect those elements and create a coherent image of value. It’s also the most important strategy for cutting down on customer defections and increasing customer loyalty.