A focus on relationship-building is vital in order
to increase satisfaction and engender loyalty. Good relationships developed
with sales and technical teams are the strongest drivers of customer
loyalty in business-to-business markets.
Building solid customer relationships
A good marketing strategy generates revenues from both new and existing
customers. New customers provide the necessary injection of fresh blood for
a healthy, growing company. However, it is the existing customers that
provide a solid foundation.
Nearly all businesses have the opportunity for a continuing relationship
with their customers and, over the years, the revenue generated becomes a
“lifetime value”. The lifetime value of a customer depends very much on
what is being sold. People do not move house often and so an estate agent
could believe that the lifetime value of customers is low. However, the
word-of-mouth associated with the move could be significant. In a
completely different line of business, a baker sells a loaf for very little
but repeated sales over 20 years could run to a cumulative value of many
thousands of dollars from a single customer.
Customers can be divided into three groups – those who stay loyal and
are unlikely to shop anywhere else, those who have moved on and will never
come back, and those who regularly shop around and may well return in the
future. Our concern is particularly to keep the loyal customers loyal and
to stop other customers defecting.
Loyalty can be assessed by asking people how likely they are to
recommend a company, using a scale from 0 to 10. It has been determined
that there is a strong correlation between people giving a score of 9 or 10
out of 10 on this scale and their likelihood of becoming loyal customers.
It is quite exceptional to have more than 30-40% of customers give a score
of 9 or 10.
The problem for most companies is not the number of customers that give
a low score of 6 or below but those who simply believe the company is
satisfactory, scoring 7 or 8 out of 10. The group giving a “middling” score
often makes up the bulk of the customer base. It is this group who award
passable but mediocre scores that are of greatest concern as their heads
could easily be turned if some other supplier arrives on the scene with
what seems like an attractive offer.
Customer Satisfaction & Loyalty
Loyalty is hard earned. It does not come from a bunch of flowers or a
nice smile, though this can help. It is earned in small servings, over
time, and can so easily be lost by one false move.
True loyalty often arises when a company does something extra ordinary
to get a customer out of trouble. There will be times when a customer
requires an urgent delivery or a machine stops working and a supplier who
solves the problem will be remembered. It doesn’t have to be
problem-solving that engenders loyalty. British Sugar is one of the largest
suppliers of sweeteners in Europe. It worked hard to win a customer in
Northern Ireland. On the morning of the first bulk delivery a young woman
accompanied the blue British Sugar truck as it drove into the customer’s
plant. She introduced herself as a customer service representative and
explained that although the customer may never see her again, she would
always be at the end of a phone to solve problems should they arise. She
had made the trip to meet the customer especially to make this point and
the customer never forgot it.
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