What gives when buyers say they’re satisfied but don’t come back to buy more?
Conventional wisdom suggests that they weren’t satisfied enough. The key to cusotmer loyalty, it’s argued, is to deliver above-and-beyond satisfaction.
Well, yes and no. Of course customers who are dissatisfied or lukewarm are a flight risk. But all kinds of research shows that customer satisfaction, in and of itself, has little impact on repeat business, says author and sales consultant David Swaddling. Even highly satisfied customers may see no reason to keep buying from you.
In fact, he says, when you ask customers whether they’re satisfied, at best you find out something about why they bought from you last time. But you won’t find out whether they’ll buy next time. Like the mutual fund ads say: “Past performance is no guarantee of future returns.”
One reason: Traditional measures of customer satisfaction look only at your relationship with your buyer. They don’t consider other relationships your buyer may have or want. Happy customers defect all the time – if they think they’ll be even happier elsewhere.
When it comes to customer loyalty, the question isn’t whether your customers are satisfied. It’s whether you’re delivering the best value compared to all other available options.
Customers make a choice every time they purchase. From among all the alternatives available at that time, they’ll choose the one that delivers the highest perceived value.
Of course, current customers remain your best source for additional sales – because there’s value for them in the relationship. They don’t have the hassle of choosing a new supplier.
But that’s not loyalty. It’s laziness. And it’s dangerous to put too much faith in it.
The good news: You don’t have to be perfect. You just have to be the best. In fact, some customers will buy even when they’re dissatisfied – if they can’t find a better option. Look at the airlines: People complain about the bad service. But if you need to get from New York to L.A., flying still beats the bus.
Here are five critical ways to increase customer retention:
1. Ignore good reviews. Judge relationships by what buyers do (that is, sales), not what they say. Keep in mind that people have all sort of reasons for offering praise.
Praise is a way of ending conversations. It can be a manipulative means of meeting a short-term objective (e.g., to get you to do something for a customer). Praise doesn’t pay the rent.
2. Ask, ask, ask. Don’t assume the rules will be the same as last time. Find out what’s driving purchasing decisions today. The buyer’s decision-making process may be subjective, unfair, or just plain wrong. But there will be a process, and how well you understand it will determine whether you keep the business. Ask the customer to explain this process, then tailor your efforts accordingly. It’s easier to adapt your selling approach than to try to change the customer’s approach.
3. Know the hot buttons. Buyers may consider dozens of factors when making a purchase. Only a few will be truly critical. One way to get a fair read: Ask your customer to assign percentages to each key factor, adding up to 100%.
4. Know how you stack up. If you asked your customer to rank you on a scale of 1 to 10 against several key factors, you might get all 9s and 10s. But so might everyone else.
What’s important is how you rate against the other options (including doing it themselves or going without). Come right out and ask your buyer how you stack up against others on these key factors. Then you’ll know exactly what you’ll need to do to win the next sale.
5. Smoke out the internal politics. You can know both the process and the hot buttons and still end up with the fuzzy end of the lollipop stick – without a clear picture of the internal politics in the prospect organization. Your best bet is to enlist the help of an internal champion to help you get the real lay of the land.
Source: Adapted from “Customer Power: How to Grow Sales and Profits in a Customer-Driven Marketplace,” ISBN 0-9700879-4-2.
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