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There are a lot of reasons customers may walk away, including your inability to give them what they want, neglect due to poor resource allocation on your part, competitor promises for new or expanded value, and shifts in buying team members and internal priorities. John Monoky of Monoky Associates talked about customer loyalty this week at the Fluid Power Distributors Association and International Sealing Distribution Association joint meeting in Florida.
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Customers have a lot of options these days, Monoky said. And many of those options are cheaper – especially online marketplaces such as Amazon. “You can become obsolete in your business if you’re not careful,” he said.
What’s more, long-term customer retention is not the norm, at least according to one study. On average, Fortune 1000 companies lose half their customers every five years, Monoky said, quoting a Bain & Company research report.
A key element of customer retention is letting them know about the value you bring.
Conducting regular business reviews with the customer is one way salespeople can do this. It’s a way to showcase and assign value to services you’ve provided for free. You may also use a review to discuss the future and identify services that can add additional value going forward.
The problem? Most companies assume that if you create superior value, customers will give you credit for it. But that’s not usually the case. In fact, Monoky calls it a “fatal error.” Oftentimes, “people in your own company don’t even know” the value you’re providing. It’s even less likely the customer will recognize it.
Distributors must have a meaningful conversation with key customers about the value they provide – whether or not the customer is actually paying for that value.