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The Science Of Loyalty

Good service keeps customers satisfied. Building trust and a sense of belonging keeps them loyal.

The general consensus of most businesspeople today is that every industry and every organization suffered losses over the past two years of this economic downturn. There was nothing any of us could have done about it. It was just one of those perfect storms that no one escaped.

That may be comforting if it were true. But it isn’t. Most organizations have been hurt, but not all. Most experienced a decline in their overall sales, profits, stock prices and every other economic measure you can think of. But there are some who saw significant growth and expanded opportunity over these past 24 months. Some, in fact, actually had the best years in their history. And not because they offered an exclusive service or product that catered to a recessed economy. In many cases, these were companies selling luxury products in highly competitive industries without reducing their pricing or the quality of their offering one bit. It’s an under-told story, I suppose, because not many people like to read about someone else thriving while they are struggling to survive. Yet, there is a valuable lesson in these success stories that needs to be shared.

What is their secret? What do they know or do that most organizations don’t?

If I told you they build better relationships than anyone else, you might roll your eyes and think that is a simplistic explanation. But that is the truth. That is what has made more companies than you could ever have imagined winners in these difficult economic times. Some are well known, global conglomerates; others are tiny, family-owned businesses. But they all follow the same formula and do the same things exceptionally well. They know how to build and maintain incredibly loyal relationships, both externally with their clients, customers, strategic partners and suppliers, and internally between their management and staff. They have discovered the Holy Grail for running a successful business in these times.

There isn’t enough space in this article to share their case studies or the specific tactics each of them employ to build great relationships. But I can offer you some of the building blocks instilled into the culture of these organizations that are responsible for their success and share with you how they apply to your own businesses in the material handling equipment distribution industry.

The Science of Loyalty
Due to the limits of page space, I can’t really summarize all of the research on loyalty that has taken place over the past 40 years. I can’t go into the fact that loyalty is a real human emotion that has been evolving in all of us for 100,000 years, or that it is a vital part of our human nature and triggered by our brain. I can’t explain how and, more important, why every person you do business with actually wants to be loyal to you and your organization, and, in fact, will be—if you simply assure them that they can safely take that leap of faith. And I can’t elaborate on how the decisions your customers make have nothing to do with your price. That’s right—nothing. What I can share with you, however, are the three “beliefs” that all of your customers, all of your end-users, all of your strategic partners, all of your suppliers and all of your employees must have before they will be loyal to you.

1. A Sense of Trust
It may seem self-evident, but before someone will be loyal to you, they first need to trust you. They need to be able to trust your capabilities and your competency, believing that you can actually do what you say you can do, and that you have the knowledge and experience to deliver on the promises you make. They need to know that you are being honest and upfront with them—not only about the specifics of what you are offering, but about your motivations as well. They need to believe you and/or your organization are moral, ethical and respectful—even when faced with criticism and opposition. Finally, they require you to be consistent—in your thinking, in your standards and in the quality of the services and products you are offering. They need to know that you won’t abandon them or change di-rections after they have accepted your initial proposition or proposal. That is trust.

Here is the catch. While it is essential that you and your organization are not only capable, but also of high character, integrity and consistency, you will never get credit for exhibiting those qualities. Why? Because the people you do business with expect you to be. You don’t get bonus points for delivering a product on time and on budget. You don’t get credit for offering a fair price. You don’t get credit for telling them the truth and you don’t get credit for having a high standard of performance and service. When someone agrees to do business with you or work for you, they assume you will do all these things or possess these qualities. If you don’t, the relationship will end immediately. But the fact that they can trust you to do what they expect is not nearly enough.

Unfortunately, most organizations focus exclusively on demonstrating how trustworthy they are. Remember a few years ago when Ford spent millions of dollars on their “Quality is Job 1” campaign? What did they think we should expect quality to be? Number 4 or 5 on our list? Of course quality should be job 1. We just spent $30,000 on a car. Having it start and not fall apart when we drive it is not a bonus! But these are the types of blinders that most companies have when it comes to building relationships. They are constantly trying to impress us with their competency, integrity, and fair and honest pricing, without understanding that these things are basic expectations.

Many companies try to impress with their competency, integrity, and fair and honest pricing, without understanding that these things are basic expectations.

Here is a test for you. Go to your Web site, pull out all of your marketing materials and ask your sales staff to give you their client “pitch.” How much of what you see, read and hear deals with these trust issues? How much focuses on what your clients and customers will already expect (high-quality product, great service, fair value pricing, etc.)? If that is your message, you may be reinforcing trust, but it isn’t necessarily buying you loyalty.

2. A Sense of Belonging
Creating a sense of belonging is a hard thing to summarize in only a few paragraphs, but the key is making someone feel like they are a valued member of your “community.” They need to feel like they are truly recognized and seen as a unique individual, not merely another customer, supplier or em-ployee. Addressing a letter “Dear Valued Customer” is not recognition. Going into a negotiation without knowing (or caring) what the other side needs—both personally and professionally—is not recognition. Offering an employee a generic performance “award” that is of little value to their life or lifestyle is not recognition. To build and maintain a loyal relationship, you need to develop both savvy and insight. You need to understand what that person needs and truly cares about. You need to know what their challenges are, what their goals are and what keeps them up at night. Most importantly, to create a sense of belonging you need to become both a trusted advisor and a welcoming friend. Whether it is a customer, an end-user, a supplier, an employee or any other important relationship in your life, you need to become indispensable to them. You need think about how your services and products can help them win.

Here is another simple test. Think of any individual or organization you do business with. How much do you know about them? Do you know how they make their money? Do you know if they are making any money? Do you know what their plans are for the next year? Next five years? Next ten years? Do you know what they fear and do you understand their greatest threats? Do you understand the impact current events, changing regulations and economic forces are having on their operations? In other words, do you understand their business as well as you understand your own? If you don’t, you are simply a vendor to them, a commodity that they can replace in an instant. If you do understand their business, however, and you are able to help them solve their problems and address their needs without them even having to ask, you become that trusted advisor and irreplaceable partner.

3. A Sense of Purpose
The Internet has been given all the credit for making the world flat and connecting all of us globally. But that shift in humankind actually began in the 1950s with the advent of television. It was television that allowed us to see the rest of the world and get a sense of the places and cultures that were previously unknown to us. These connections have caused us to think about our lives much differently than our ancestors, especially when it comes to loyalty and who we will be loyal to.

For 99,950 of the last 100,000 years, humans were loyal to those they could trust and those who welcomed them into a community and looked after their interests. But as we started to understand that we were all part of a larger “community,” our interests changed. Today, loyalty also demands a greater sense of purpose. Something that tells us that this relationship is about more than just you and me; that together, we are somehow making a difference and not just making money. This global thinking is what spurred the green movement and discussions of climate change. It is why the NFL players wear pink shoes and major league baseball players use pink bats on Breast Cancer Awareness Days. It is why Apple, American Express and more than 100 other companies participate in the RED campaign to fight AIDS. People don’t have the time or capacity to solve these global challenges themselves, so they look to the relationships they have for help. When they believe that the people they are working with are helping a cause that they too believe in, they will be loyal.

One final test. Do you or your organization support a social cause? Are your clients and customers and employees aware of your support? Do you take credit for contributing to this cause or do you share the credit with your clients and customers (the real contributors)? The important thing to remember here is that the people who provide you with the resources to contribute to a social cause also want to make a difference in the world. Thanking them and acknowledging what they made possible is an important gesture on your part if you want them to be loyal to you. They won’t be loyal because you did something good. They will be loyal because you made it possible for them to do something good.

Loyal relationships don’t begin that way. They are created, and then maintained. That means every relationship you have can be made loyal given the right attention and the right understanding. The key is demonstrating the behaviors that will produce a sense of trust, a sense of belonging and a sense of purpose in everything you do.

Material Handling Equipment Distributors Association

James Kane Meet the Author
James Kane is a loyalty strategist and consultant on building and maintaining loyal business relationships. He can be reached on the Web at www.jameskane.com.

 

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