In research conducted by HR Chally, 80% of customers who defected from their current supplier described themselves as satisfied or very satisfied!!! How could that be? So much for measuring customer satisfaction….
No customer/supplier relationship is static. Things change. People change on their side. People change on your side. Economic conditions change. Technology changes. Customer priorities change. Your company’s priorities change. It is your ability as a company to step up to the challenge of change that differentiates you as a company. The ability to change, requires an ability to learn.
First and foremost, it is important that you learn how value is perceived through the customer’s operating reality.
A customer has challenges with a certain set of products and services. In other words, they are at a “recognition of needs” in their decision process. Your company comes in with a proposal/presentation and your relative cost to eliminate the challenges has tremendous perceived value. The customer awards you a contract. Over time, and change, as described earlier (people, priorities, technology, etc.) takes place. Add to this dynamic environment the fact that the customer sees little to no challenges with the areas of business you have been handling, but has also has been bombarded by other suppliers stating that they could deliver a better program at a lower price. Unfortunately, this supplier wasn't doing Quarterly Business Reviews and uncovering changing priorities.
The fact is, you are now at The Point of Fear®!!! Your client is officially vulnerable to competitive threats!!!! Are they satisfied? Perhaps, they are satisfied, but satisfaction does not equal loyalty!
What could be worse? A new key decision maker (“KDM”) enters the picture. This is what is known as the Changing of the Guard®.
The new KDM has no history with your company and the value you created. In this case you move from green or "all good" to being “red” in terms of your Client Risk Analysis. Most likely, the end is near….
Could this situation have been prevented? Could you still save these much valued customers? The answer is yes to the first question. It depends to the second question.
Let’s wrap up with what could have been done to prevent The Point of Fear® and Changing of the Guard®. At a high level, it comes down to three critical things:
Measure Customer Loyalty through Net Promoter® Survey.
Implement Key Account Management including a Client Risk Analysis
Conduct Quarterly Business Reviews in an effort to advance the relationship.
At Butler Street, we specialize in client retention and expansion. Get started today by registering for the Net Promoter® Survey.