Client loyalty can be achieved only if relationships are consistently built and nurtured. People at the three levels of an organization (operations, middle management, and executive) have different perspectives on you, your company, and your company’s solutions.

As was pointed out in Chapter 6, “How to Establish Credibility with the C-Suite,” people at the operations level focus on getting the lowest price and the steepest discounts. They also want to hear the technical details of your solution so that they can compare you with your competitors and select the lowest price. Nowhere in the conversation is there any mention of value and loyalty.

At the middle management level of the organization, people want to understand how your solution can be integrated into their organization. But while their questions will be broader in nature than those posed at the operations level, they still don’t focus on value and loyalty.

It’s only at the executive level of the organization that the focus is on value and that loyalty can be cultivated. Executives understand how value is created and delivered, and they fully understand the true value of loyalty. Loyal relationships are important at the executive level—and most executives are open to the cultivation of those types of relationships.

In his book The Loyalty Effect: The Hidden Force behind Growth, Profits, and Lasting Value (Boston: Harvard Business Review Press, 2001), Bain & Co. director Frederick F. Reichheld uses examples from State Farm and Toyota/Lexus to illustrate that loyal clients lead to substantial profitability over the long term.

According to Reichheld:

One common barrier to better loyalty and higher productivity is the fact that a lot of business executives, and virtually all accounting departments, treat income and outlays as if they occurred in separate worlds. The truth is, revenues and costs are inextricably linked, and decisions that focus on one or the other—as opposed to both—often misfire.

Companies cannot succeed or grow unless they can serve their customers with a better value proposition than the competition. Measuring customer and employee loyalty can accurately gauge the weaknesses in a company’s value proposition and help to prescribe a cure.

While every loyalty leader’s strategy is unique, all of them build on the following eight elements:

1.   Building a superior customer value proposition

2.   Finding the right customers

3.   Earning customer loyalty

4.   Finding the right employees

5.   Earning employee loyalty

6.   Gaining cost advantage through superior productivity

7.   Finding the right capital sources

8.   Earning their loyalty

Reichheld found that those clients who give greater loyalty typically generate more profit over the lifetime of their patronage. We agree. Increased profitability from customer retention occurs because:

•   Acquisition costs are incurred only at the beginning and are amortized over the life of the relationship.

•   Long-term customers provide annuities and are less sensitive to annual price increases, within reason.

•   As trust is developed, referrals follow.

•   Purchases of add-on products and upgrades are a natural extension over time.

•   Regular customers require less education, and repeat exposure allows the seller to build expertise with each client.

But as our own research consistently found, typically there is a gap between the value you deliver and what the executives think you delivered. In Chapter 6, “How to Establish Credibility with the C-Suite,” we observed that this could happen because, although the supplier has done an outstanding job, nobody bothers to tell the executive about it!

Having coached the world’s largest companies, it never fails to surprise us how businesses that are so smart in most things can be so cavalier in how they look after their customer relationship management. There’s a certain lemminglike behavior we see, with companies calling their salespeople “account managers” without giving much thought to what “account” and “manager” really mean. When these companies weight the sales commissions and bonuses of account managers to favor the pursuit and capture of new customers, the account managers adopt a sell-and-run mentality. By default, the customer relationship is transferred to the delivery team, whose members are usually technically proficient, but lacking in sales and service acumen.

Everybody thinks that the customer is being “account managed” because the account manager’s job title suggests it. But the way the account managers are rewarded drives hunter behavior and is at odds with the mandate implied in the job title. At the end of the day, you get the behavior that you measure and reward. When customers vote with their feet, it is often to the complete astonishment of the members of the vendor’s management team, who seldom recognize that their own dysfunction caused the migration and routinely slash their prices as an incentive to win the customer back.

Client executives report a strong attraction for the companies that recruit a different breed of person to farm the account (hunters and farmers are entirely different breeds, as any psychometric profile will immediately demonstrate) then remunerate the farmers for displaying appropriate behavior, and then track and communicate the value delivered. They also indicate a higher interest in remaining loyal if the recent positive experiences remain consistent over time.

If the recent experience exceeds expectations, customer loyalty is likely to be high. Loyalty can also be high even with poor performance if the expectations were originally set low; if switching costs are high; if there are no alternatives; if the social, cultural, or ethnic relationship is not easily replaced; or if there are other lock-ins such as contractual terms, shared technology, economic codependence, or a geographical imperative to retain the same suppliers even though they do only an average job.

As shown earlier in this book, senior executives typically get involved in the buying cycle for major decisions at two specific times: early in the buying process to set the overall project strategy, and also, more importantly, late in the buying cycle to measure the results and understand the value delivered by the solution provider. At this postimplementation stage, executive buyers expect the salesperson to provide regular input, report any barriers they need the executive to remove, and quantify the value delivered to the executive’s business. Communicating the value delivered differentiates them from competitors and is a foundation for client loyalty.

Aim to build loyalty at (or connected to) the executive level because this is where you can obtain the best leverage. Senior executives have a companywide view of the organization and will typically ask questions that are focused on value and the return on investment of your solution, whereas lower-level executives may be focused only on price and discounts within their own department.

In his book All for One: 10 Strategies for Building Trusted Client Partnerships (John Wiley & Sons, 2009), Andrew Sobel talks about the competitive advantage of cultivating loyal customers:

Loyalty, in the complex world of business-to-business relationships, is based on a subtle blend of demonstrated value added, personal trust and reciprocity.

STEPS IN CULTIVATING CLIENT LOYALTY

Cultivating client loyalty is a methodical process that combines the business and personal aspects of the relationship. Asking executives appropriate questions as you advance the business discussion may uncover areas of common interest as a foundation for a personal relationship. It’s important to gauge the extent to which the executive is interested in having a social relationship beyond meetings that only focus on “talking shop.”

There are some salespeople who focus only on the business relationship and keep a “professional distance” from the customer. A few industries demand a degree of aloofness be preserved to avoid any impropriety in the buyer–seller relationship. So on one side of this issue we see salespeople who cannot legally build this rapport. There are others who are under no restrictions, want to develop a personal relationship, but don’t know what social chitchat appeals to an executive. And there are yet more who have no interest in building any social currency, who prefer to keep their dialogue more clinical and focused on processes, performance, and ROI.

On the flipside of this are salespeople who operate entirely in the party zone, who escalate from grabbing a coffee, to having a lunch, to hitting a bar after-hours; who are able to shift gears from walking with the executive on the floor of a business exhibition to walking the fairway of a golf course together. During this courtship they get comfortable enough to exchange amusing memes and videos, and a new friendship is born. In the most extreme examples, the salesperson will do anything to preserve this social relationship and may even start to feel it demeans the relationship to ask her new friend to actually buy anything from her.

Where you want to operate is somewhere in the middle. As you learn what’s important to the executive, you may from time to time get a glimpse of how his personal motivations can be advanced by his business goals. Finding ways to address his personal and business agendas at the same time is a central theme when building loyalty. Even if you can’t deliver results right away, showing that you think this way may be enough for the executive to keep you close.

So how can you do this?

It’s like climbing the steps of a staircase—a Loyalty Staircase—where simple actions on the lower steps provide a foundation for ascending to the next step until you reach the top (see Figure 8.1). This is a tried-and-tested approach used by the world’s most successful salespeople, and, importantly, it is validated by the executives themselves as what they reward salespeople for doing.

Figure 8.1 The Loyalty Staircase

Now let’s go climbing . . .

Step 1. Explore Common Ground

Client executives expect you to know what’s important to them—so make certain that you do your homework not just before your initial meeting with them, but after they become a customer. Here are a few ideas:

•   LinkedIn is a good place to start if you haven’t met the executive yet. See where they’ve worked before and whether you or anyone in your sales team shares her company, industry, or geographic history. Do you share any of the same personal connections? Have you attended the same schools or belonged to the same associations? Do you follow the same online groups or forums? Even if you don’t now, you might start to follow the same things that the executive does, if only for a short time. This allows you to see some of the same posts that hit her in-box. From time to time you might see her comment, which reveals something about her attitude and affords you an opportunity to join the same conversation.

•   Go to the client’s website and access the last few annual reports. Within each annual report, pay special attention to a section called the “President’s Letter to Shareholders” or similar title. This document contains a treasure trove of information about the key business and industry drivers, along with some of the initiatives that the company has put in place to address those drivers. Most salespeople focus on trying to dissect the annual report and drill down on the company’s financials (which are important). However, the President’s Letter offers a much clearer perspective on the company’s important and immediate business issues. In these you may find common ground between what they are on the record as wanting to achieve and what your company can do.

•   Access business, financial, and industry sites that allow you to compare how this company stacks up against its competitors in the same industry. Some of those sites are listed in Appendix A of this book, Guide to Client Discovery. Look for how your client compares with other companies in the same industry with respect to profitability, growth, and other important business metrics. They may be a leader that wants to maintain their dominance, a smaller player hoping for a bigger slice of pie, or a company that’s falling off the mountain and grasping for a handhold. Regardless of which direction they’re moving in, you can show common ground by sharing how your own company was once in the same situation and achieved the same goals, or by showing how the work you’ve done for other clients contributed in some way to stability, growth, or a turnaround.

•   If they’re a public company, listen to or read the transcripts from their quarterly earnings calls to financial analysts, as these offer insight and analysis. Typically, these calls are run by teleconference or webinar and can be found on the company website, Yahoo Finance, or similar locations. They begin with a company’s investor relations officer reading a safe harbor statement to limit the company’s liability should actual results prove different from the indicators they report. Then one or more company officials, often CEO and CFO, will discuss the operational results and financial statements for the period just ended and share their outlook for the upcoming period. The call is then opened for questions by investors, financial analysts, and other delegates. Granted, what the company officers say is based on rehearsals they’ve run to anticipate and answer the most likely analyst questions. Yet despite the semiscripted format, this is an ideal source to learn about current and emerging business issues you may not see listed anywhere else. It’s another source for finding common ground about how you might help.

•   A company’s marketing department may produce media profiles on their executives, plus a list of recent speeches, keynotes, or webinars. These can reveal more information to help you find common ground.

Step 2. Create the Initial Relationship

You already know the importance of making a positive first impression when you start any relationship. It’s even more important after you win your first sale with an executive. This is where rubber hits the road and they get to see if what you promise is the same as what you deliver. This isn’t about reality but about impressions. Make certain your solution will create and deliver what you said it will and that you have a comprehensive implementation plan to exceed their expectation. Go above and beyond the service level agreement. Delight them. Do everything possible to deliver an experience that’s as flawless as it can be. You never get a second chance to make a first impression—so make it count.

Executives tell us that overcommunicating in the early stage of a relationship is better than undercommunicating (or worse, making them chase you). As you shift from talking to them with your sales hat on to working as a cog in their business machine, ask how they like information delivered beyond the formal reports and scorecards. Whether they like a regular phone call, monthly meetings, or a concise e-mail, your objective is to keep the executive updated on the key issues and obstacles you face in their organization (and yours), how you plan to resolve them, and what help you need them to give from time to time. Don’t deliver only the good news. Tell them what’s really going on.

Step 3. Continually Expand the Relationship

”Land and expand” is where you take the corporate relationship up, down, and sideways. Executives confirm that it fills them with greater confidence if a supplier is seen working effectively with people across the enterprise. This may sound like a paradox if past experience trying to sell to clients has taught you they try to restrict how many people you contact. But that’s when you’re on the outside looking in.

When you’re on the inside already, it’s actually in the customer’s interest for you to be as active with their people as possible, where relevant to the work you’re undertaking for them. In fact, the more people you talk to in the executive’s company, the better they can monitor the quality of your work and the content of your conversations. The grapevine is one of the informal reporting mechanisms they tap into.

So you might volunteer to work with lower-level managers or ancillary departments who are users of your product or service or benefit from it being in place. Sometimes the executive will refer you to people whose relevance you don’t immediately recognize. Always accept these invitations, but ask the executive to make this introduction so it’s not a cold call. Their subordinate now understands their boss sent you to meet them. It’s an endorsement. Make certain you exploit both sides of that internal relationship.

Once you are committed to an expanded level of relationship in the executive’s vertical silo, you should expand the relationship laterally to include other executives in other silos. You never know where the next opportunity for your solution may lie—it could be in a different functional area, in another part of the country, in another part of the world, or even in another company if the executive sits on several boards. Your reputation for delivering value is what you should be leveraging.

So always exceed expectations in all areas—large and small—and honor your commitments no matter how small they seem. Simply returning phone calls on a timely basis and going the extra mile when you respond to the executive’s questions can go a long way toward increasing the executive’s perception that you always conduct yourself in a businesslike manner.

Always listen to your client’s issues and problems before you propose any solution. Make certain that you are seen as always adding personal value using your company’s resources and offering your company’s solutions that create value. If necessary, offer partner resources when you don’t have a complete solution. And, lastly, make certain that you clearly and consistently communicate the value of your solutions—never assume that the executive fully understands the value that you deliver. In fact, you should always conduct an annual meeting with selected client executives specifically to communicate the value you have delivered during that year and your expectations for the coming year.

Step 4. Form Long-Term Loyalty

Beware of overconfidence when it comes to customer loyalty at the C-Suite. Gartner and ZDNet report that 89 percent of companies claimed they would compete primarily on the basis of an “enhanced customer experience” in 2016.¹ In 2017, 80 percent of these companies were beating their chests in the belief they had actually delivered a superior experience. Yet when customers were surveyed, only 8 percent felt they’d seen a loyalty-inspiring experience.²

This gap is the result of a growing divide between B2B suppliers still doing what worked perfectly well in the twentieth century, and the new generation of C-Suite leaders demand something else. With companies around the world losing more than US$300 billion as a result of customer churn, Frost & Sullivan predict that by 2020 “the customer experience” will overtake “price and product” as the main differentiator.³

How can you get on this train?

The first thing is to realize C-Suite buyers are undergoing a technology-enabled shift in how they expect you to interact with them. This began in 2015 as digital natives started taking their seats at the executive table and will be a driving factor for several decades. Generation Y workers born between 1977 and 1995 will be passing through their career peak (ages 30–50) between 2007 and 2045. Generation Z workers born between 1997 and 2015 will be passing through their career peak from 2027 to 2065.

They expect timely and personalized access to you and your company’s services anywhere, anytime, through any device. They expect queries to be dealt with quickly by an informed expert. Over 71 percent of these buyers equate how much you care with how easy you are to find and how quickly you respond to them. They want all interactions to be contextualized and personalized and for you to make it simple for them to talk or buy with less effort—60 percent even say they’re happy to pay a higher fee if it delivers this.

You can see in Figure 8.2 how contact preferences have changed over time.

Figure 8.2 Shifting Contact Preferences in the Customer Experience

By way of explanation, you know what is meant by “human agent” and “e-mail.” “DTMF IVR” is where clients dial a number, and the key tones from their dial pad lead them through a menu that conducts them to a relevant person. “Speech IVR” is a more humanized form of the same task where the client speaks instead of pressing buttons. “Web (all devices)” covers the experience executives have on your main website and your mobile-optimized single-page sites and interacting with web-based e-mail campaign landing pages, pop-up text chats, and surveys.

It’s the fast-growth “Others” category you need to pay attention to. It shows a pattern of exponential growth and includes the rise of social media channels like Facebook, LinkedIn, and Twitter, and online video conferencing like WebEx, GoToMeeting, and Skype, plus other customer experience technologies driven by machine learning and artificial intelligence (AI) in pursuit of an “omnichannel experience,” where a customer’s interaction history allows them to start a discussion with you in one medium (like a chat window) and seamlessly complete it in another (with a phone call, for example).

The common theme here is one of personalization. Customers are no longer satisfied being grouped into a market segment with millions of users. The new segment is an audience of one.

As a sales professional, it’s your job to be there for C-Suite clients where, when, and how they want to talk, without them needing to repeat things to help you catch up. If your company doesn’t offer this capability, your sales may plateau through no fault of your own. But there’s nothing stopping you from dipping into your own commission funds to subscribe to technology or services that allow you to offer the personalized experience that earns the fealty of the C-Suite.

This is a mindset that differentiates true sales professionals (who take responsibility for every aspect of their success) from people who “just work in a sales job.” It’s worth taking inventory of this from time to time. For example, what is the last book about selling you spent your own money to buy (before you wisely bought this book, of course)? When is the last time you paid to attend a training seminar on a new aspect of selling? What’s the latest app you purchased to help you sell, manage your time, aggregate your social media, or engage with customers, that’s not part of your company’s core sales technology? Do you pay someone else to do research, create prospecting lists, send e-mails, or call customers on your behalf? Do you see yourself as an employee or as an agent of change? Are you in control of every link in the sales process that your income depends on, or do you let people and processes outside your control place your financial future at risk? If any of these questions makes you uncomfortable, that’s the future calling. Respond accordingly.

Of course, beyond personalization, easier and more seamless methods of contact, and feeling respected as “an audience of one,” a perennial currency that buys C-Suite loyalty is delivering on the promises you made on behalf of your company, putting out fires, measuring the value of what you’ve delivered, getting credit for it from the people who most influence your contract renewals and expansion to other opportunities, and bringing them new ideas to create additional value. We’ve covered these techniques amply in this book’s other chapters.

When discussing value, always use the executive’s own industry or company jargon. Quantify the time saved, problems solved, risk reduced, revenue increased, costs removed, and lives improved. Wherever you have examples of specific people’s jobs getting easier and how this frees up their time or improves their effectiveness, place a value on it. Show the return on investment being achieved as a result of your company delivering the promises you made in past sales. Consider asking your company’s financial experts to help you prepare and even present financial information if you’re not comfortable talking about spreadsheets and using accounting language.

Step 5. Continually Find Ways to Excel

As you continue to enhance the client relationship, you have multiple opportunities to add value. Doing so consistently allows you to advance from Commodity Supplier to Emerging Resource, then to a Problem Solver subject matter expert all the way up to Trusted Advisor where you come to be seen as a consultant to the executive at a personal level as much as a business level. A way to measure this is by contemplating the questions they ask you in each interaction. Are they focused only on the project or service you’re delivering, or do they range to other areas? When an executive starts asking your opinion about issues unrelated to your company’s core work, it’s never a bad sign.

So how should you work with client executives when things go wrong, there are unforeseen delays, your product doesn’t work as promised, and relationships get strained between the client, you, and your company? Do you vanish behind the scenes to solve the problem, with the intent of calling after you’ve put out the fire? No. Make yourself highly visible as soon as possible to the client executive, showing him that you understand his pain and you’re working on his behalf to get things on track. Make certain that you’re visible as an active player when things aren’t going well. It’s even better if you see the problem before it happens, and give the client executive advance warning along with an explanation of how the situation will be resolved. Nobody likes surprises.

A head office executive told us of a salesperson who had sold his company a multimillion dollar mainframe which was installed at their largest manufacturing plant. That computer had quickly become an integral part of the company’s business: scheduling the plant floor, ordering the right supplies, and controlling the inventory. Suddenly it fell out of service and red ink started to flow. The client executive was impressed that the salesperson immediately scheduled an appointment with him and brought their branch manager, service specialists, and even flew engineers in from the client’s manufacturing plant. The problem was found and the mainframe was repaired within a week. During that time, the salesperson made certain she was visible as an active participant who kept all relevant executives informed of progress. The top executive never forgot this salesperson and later told her: “You show up when things go wrong, not only when they go right.” He found this willingness and proactivity in being held accountable a rare trait, which solidified the salesperson’s position as a Trusted Advisor in the years that followed.

Clearly, cultivating client loyalty is achieved by consciously implementing a methodical step-by-step process as you climb the Loyalty Staircase. This begins with exploring common ground with the executive and culminates in a long-term relationship. Though carrying out this process will take time, always remember which step you are currently on so that you can optimize your position. Beyond that, you should constantly seek ways to excel—to continually differentiate the value you deliver to the client organization—so the corporate relationship can be sustained and expanded even if individual players come and go.

Executives transfer to different departments; move to new firms; and take freelance, board, or advisory roles all the time. So never be satisfied having a Trusted Advisor relationship with a single executive or in only one department. Cultivate loyalty across the client organization, expand your network, and optimize those relationships—whether in the same company or other firms executives migrate to. Even when an executive’s new role is in a different industry, they may continue asking for your guidance. Executives are loyal to salespeople who bring loyalty and value to them.