“If you want loyalty - get a dog.” - Grant Fairley

Is client loyalty still relevant in this day and age when clients can switch at the click of a mouse? Like electric windows, anti-lock brakes, and air bags, what is innovative and sets you apart from the competition one day may be commonplace the next. As competition becomes more intense, clients view your services as a commodity. When low-cost, low-frills competitors enter the market, buyers become unwilling to pay for an undifferentiated product or service—leading to price compression. Loyalty to the best value replaces any previous loyalty to a supplier.

In such an environment, client loyalty is even more important. Fred Reichheld, author of The Loyalty Effect, argues that loyalty is still the fuel that drives the financial success—even, and perhaps especially, in today’s volatile, high speed economy. The cost of replacing a profitable client is extremely high. By contrast, client loyalty brings revenue growth, cross-selling opportunities, increased efficiencies, referrals, and price premiums.

Short-Cuts Don’t Cut It

However, very few companies put their money where their mouths are. They don’t invest in understanding and measuring client relationships and emotions. Instead, they take comfort in some generic, mechanical, and impersonal client satisfaction survey results or anecdotal information. They further compound the problem by having sales or business development people masquerading as account managers.

According to a Leadership IQ Inc. survey of over 1,000 board members, 28% of CEOs were fired because they ignored customers. For B2B suppliers, the implications of this finding are profound. The tell-tale signs of a deteriorating client relationship typically appear after the damage is already done. That’s when the diving save, the search for the guilty, and vows of “never again” begin in earnest.

There is increasing evidence that emotionally satisfied clients contribute far more to the bottom line than rationally satisfied clients, even though they appear to be equally satisfied. Neurological research by Gallup Organization (“Manage Your Human Sigma” – Harvard Business Review, July, 2005) showed that the brains of customers who had the strongest levels of emotional attachment to a specific company also had significantly more activity concentrated in parts of the brain related to emotion when thinking about that company. More striking was the strong correlation between emotional attachment and self-reported share of spending. In other words, there seems to be an underlying neurological mechanism that links emotional attachment and subsequent client behavior.

Share of Mind

As Robert Half said, “When the customer comes first, the customer will last.” To be able to put the customer first, however, you need to provide more than just lip service. Unfortunately, mass client satisfaction surveys can hardly tell the difference between merely satisfied versus truly engaged clients. So how does one stop worrying about a share of wallet and focus on getting a share of mind?

Start by gaining a true, unbiased understanding of your clients. You’ll find answers with objective, third-party, holistic relationship reviews through key stakeholder assessments. If these reviews are personalized, in-depth, and conversational, they can collect a lot of rich information that is impossible to collect through mass surveys. While one size doesn’t fit all, you can objectively test for emotional connections by asking open questions in four key areas: