The Customer Loyalty Loop

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The Customer Loyalty Loop Page 10

by Noah Fleming


  There are many examples of Ericksonian wisdom in Jay Haley’s book Uncommon Therapy: The Psychiatric Techniques of Milton H. Erickson.5 For example, a woman in her twenties came to consult with Erickson about a major problem. The woman was frigid, and the idea of sex brought on a ton of anxiety. Erickson discovered that the client’s mother had told her that sex was evil, dirty, and forbidden. Mom, unfortunately, died when the client was a preteen, and now she continued to cherish her mother’s memory, which meant holding on to her edicts about sex.

  The first inclination in a situation like this is to explain that the client’s mother clearly had a problem and was giving very inappropriate messages about this critical part of life and personal development. However, Erickson knew that wasn’t going to work because such a message was inconsistent with the client’s positive views about her mother. She was very unlikely to accept such a narrative, even if any objective person could see that it was the truth. Remember, we’re dealing with the mind here, and emotions are way more important than the facts. Erickson knew that he had to construct a narrative that was consistent with her mom being seen in an almost perfect light. How did he do that?

  “Your mom was right,” he said. “Sex is evil, dirty, and forbidden—when you’re 12. Unfortunately, your mom didn’t live long enough to give the 15-year-old message about sex and the 20-year-old message about sex and the 25-year-old message about sex.”

  Erickson then explained that he was sure that the client’s wise mother would have changed the message as her daughter reached maturity. You can imagine Erickson explaining what the different messages were and concluding that her mother would surely have told her that by the time the client reached her current age, her mom would be encouraging her to have a healthy sex life. Apparently the client was able to accept this message and begin to develop a healthier attitude toward sex.

  What Erickson was able to do here was to circumvent the resistance by presenting the information in such a way that the client was able not just to own the message but want to believe it. He was the master of Omega strategies.

  Most companies, salespeople, and most sales training focus almost exclusively on the Alpha persuasion tactics as opposed to removing friction by embracing the Omega strategies. For example, there’s a certain subset of marketers and salespeople who think of it as a greased chute. They believe, “My job is to create an experience by using all the sales persuasion techniques in my arsenal that selling is so seamless, it’s like a greased chute that the customer flies down, eventually coming out at the bottom and throwing their credit card at my feet.” Seamless is key, sure, but not like this. Not surprisingly, organizations that utilize these kinds of salespeople can often find difficulties in retaining those clients after the initial sale. Why is that? Well, it’s quite simple. You have not reduced the friction or resistance to being sold. You’ve merely bypassed it, which is fine if you want one sale, but not fine if you want multiple sales and dramatically increased revenue.

  Most companies will tell you that they don’t do this sort of thing, they find it reprehensible, and that their professional sales staff is far above such things. They’ll tell you that they focus heavily on building “value” and giving more and more value. But those same companies have sales compensation structures that all but ensure that’s the behavior they’re getting. My mentor, Alan Weiss, often talks about the two types of belief systems in an organization—expressed views and beliefs in action. Expressed beliefs are what you tell people you believe, what you put in your mission statements, what your PR people tell the world. Beliefs in action are how you act on a day-to-day basis. Weiss often tells a story of watching a VP scream at an employee for a minor transgression while standing within two feet of the bronze mission statement on the wall, which promised respect to all employees. This kind of disconnect is depressingly common and can be seen in many departments, but rarely is it so destructive as in a sales department.

  This is because though organizations often talk about wanting full collaboration between departments, and talk about wanting to create long-term customer satisfaction and value, the reality is that the sales department is often rewarded based on their hunting ability—the ability to close a new deal, meet aggressive quotas, get more new clients. We’ve all seen the stereotypical image of a salesperson “ringing the bell” after getting a new deal in pop culture, and many of us have seen it in our offices, but how often have you seen the alarm that goes off when a customer leaves? Not very often, I’d guess. In fact, most businesses aren’t even listening for that alarm. Their ears have been trained only to hear the ding of the bell. More important, how often have you seen bonuses rescinded when a new customer never comes back? If the compensation structure is geared toward new customer acquisition, then you’ve told your team in no uncertain terms that customer acquisition is the most important thing happening in your business. Sad, but true. Let’s continue to focus on reducing friction and resistance by treating this part of the buying experience in the context of the whole customer experience.

  When someone moves from Stage One to Stage Two, they’re still not entirely convinced. They are intrigued, sure, but they’re not totally sold or ready to move forward. Stage Two, as mentioned, is about continuing to build trust and remove resistance. Knowles’ work in influence and persuasion is perhaps far stronger than that of Cialdini’s these days because you remove resistance not just during the sale, but after the sale as well. Consider again, the customer who has slid down the greased chute with all the powerful persuasion techniques of the stereotypical salesperson. What’s the first thing a customer feels after purchase? Almost always, they feel buyer’s remorse. In much of my work with clients, we have to work reactively because they have retention problems, and the retention problems stem from the expectations gap to the greased chute, to the use of the wrong persuasion techniques. When reducing resistance and friction early, we remove almost all of the buyer’s remorse that crops up. When you drive a customer without conscious thought about what happens on Stage Two, then you’ve missed a lot of important steps that cause more problems later. The customer is convinced that they’re making the right choice and companies are no longer left dealing with the proverbial questions of “Why are our customers leaving us, and what can we do about it?”

  Customers don’t spend all their time thinking about opening up their wallets for our companies. The problem with only using the tactical persuasion techniques is that though we might move a customer to the third stage and create the action or the intended conversion, we don’t remove all reluctance, indecision, and upcoming remorse. It’s almost impossible to create customers for life, or even happy, delightful, raving fans if you’re not carefully considering that in this stage.

  Three Types of Resistance

  Knowles argues that there are three types of resistance. The first, he says, is reactance. Reactance is the resistance against the persuasion process itself. People aren’t idiots. They know when they’re being sold and pitched, and they resist it. They react by essentially saying, “Look, I understand what you’re trying to do here, and I don’t like it! Leave me alone.”

  If you think about today’s digitally connected world, is it any surprise that this might be the single largest driver of customer resistance? Think of the last time you stepped foot on a new car lot. You see the salesman from outside; he narrows in on you like an eagle stalking its prey, and he starts walking toward you. Furniture stores are incredibly guilty of this. You walk in, and you’re swarmed by a hungry seller hoping for a small bump in commissions on her next paycheck.

  We’ve all felt this type resistance to the sales experience, and we react to it. It’s only more amplified today, and you need to be aware of it if you are interested in increasing customer loyalty. Contrast that to Elon Musk and Tesla, who have removed almost all friction from the buying process, by effectively letting you build your car online and press the checkout button without ever having to talk to a salesperson. This i
s what I’m talking about when we talk about the science of the customer experience. How much reactance–resistance are your selling efforts creating? Is your sales process built on the tactics of persuasion to move the customer to action, or do you work to remove the resistance early?

  The second type of resistance is skepticism. We’ve all felt skepticism about an offer. You’ve heard the line “If it seems too good to be true, it probably is.” Clever marketers have used influence techniques to blast past the skepticism resistance, but you’ll never create a long-term loyal customer if that’s the case. They feel it. Deep within their souls, the feeling of skepticism will always linger. Skepticism isn’t always deceptive. Sometimes it’s simply the feeling that “You know, this product looks great, but I’m not sure it’s the right one for me.” Again, in Stage Two we have an excellent opportunity to deal with skepticism by understanding it’s there and building our customer experience and sales process to ensure it’s always dealt with before the sale, rather than after.

  The third type of resistance is inertia. Knowles argues that this type of resistance isn’t caused by the persuader but by the prospect herself. Knowles says this is as disappointing for salespeople as it feels like their prospects are being rude, unresponsive, and so on. In those cases, it’s more likely that the other causes of resistance are the reason why they’re holding out. Salespeople that call too often and follow-up too much, for example, start to seem desperate. I’ve made this mistake numerous times in my career. I haven’t dealt with the reactance or skepticism, and I’ve lost the business because of it. Or, I’ve moved a customer through without dealing with it only to have to deal with it later. But in the case of inertia, it’s often the one being persuaded who is reluctant to change. It’s important to gauge for this early on. Don’t get me wrong. Time is money, and if someone has no plans on taking action or creating a chance, we can’t stick around forever. But even then, there’s an excellent opportunity to create an experience that’s engaging and memorable enough that when the prospect is ready, we’ll be top of mind. Remember, it’s all a relationship business now.

  So here’s an important question: If our customers feel all this resistance as they move from Stage One to Stage Two, what’s the most efficient thing we can do to move to conversion without coercion? We’ve already established the importance of building trust, but another method of dealing with resistance is to acknowledge it in the first place. So many sales and marketing experts have been using these boardroom buzzwords of “authenticity” and “transparency” over the past couple of years, without actually telling us what they mean when they say that. Around the back door, I think what they’re trying to say is that people have become increasingly immune to tactical persuasion, and this is one way to overcome resistance—by simply speaking the truth.

  Removing resistance is the key to Stage Two. Instead of asking ourselves how we can better persuade and convert tactically, we need to be asking how we can better provide value to the customer at this stage. What if you redefine the conversion process by stressing the importance of a long-term relationship with your customers early on?

  For example, as a slight digression, here’s a “tactic” you can start using right in Stage Two. Consider this question often asked at many businesses at the time of conversion: “And how did you hear about us?” The reason they’re asking this question is pretty simplistic. They want to collect marketing data. It’s pretty straightforward Marketing 101. If 10 people told you they heard about you from a friend, and 90 people said they found out about you on Facebook, that’s pretty significant in terms of where to invest additional marketing dollars. But here’s the tactic you can use that continues to build on the fact that you not only think in terms of a long-term relationship but also that people refer you. Instead of asking, “And how did you hear about us?” change the language to “And do you mind if we ask who referred you to us?” If they give you someone’s name, you say, “That’s great! Thank you so much for letting us now. We’ll be sure to thank her.” But if they say, “Nobody. I saw your ad on Facebook,” here’s your opportunity for a slight reframe. You respond by saying, “Oh, that’s odd, because 90 percent of our business comes from word of mouth.” What you’re doing here is planting the seed for future referrals (that they’re somewhat expected and common). More important, you’re also implying that your customers must be so happy with your products and services that a long-term relationship with your firm is the norm and that you expect them to be so thrilled that they’ll be routinely telling others about you.

  The Psychology of Guarantees

  We’ll talk later about guarantees and the “risk-free for 30 days” types of offers that we’re all familiar with, but it’s important to take note of why these work specifically well in Stage Two to remove resistance and friction from the conversion process itself, and how you can make them even more appealing in your business. There have been lots of different types of guarantees used in business over the years. Everything from the money-back guarantee to the risk-free guarantee, to the satisfaction guarantee, to the lowest price possible guarantee and many more. In the past few years, we’ve seen more extreme examples of guarantees used with great success. For example, Zappos became best known for its massive 365-day return policy. Identity theft protection company LifeLock offered a $1 million guarantee to its customers in the event of identity theft. This guarantee in particular, however, was squashed when the FTC (Federal Trade Commission) decided it was deceptive in nature. LifeLock was sued by the FTC for $100 million, and the FTC won. Don’t let this scare you away, though. When used properly, guarantees are an especially powerful tool in the second stage of the loyalty loop, and I’ll show you how to do them right.

  There’s only a few simple questions we need to answer about guarantees to build them for almost any business. And before you say, “We could never use guarantees in our business,” think again. I could make a case and provide examples of guarantees and risk reversal to be used in any type of business. To create an effective guarantee, you first need to find all the reasons your customers might not be buying, and then create guarantees to alleviate those concerns. The goal of risk reversal and guarantees is to give your prospects 100 percent certainty and assurance in their decision-making process.

  Why Do They Work?

  It’s really quite simple. You take nearly all the risk off the customer’s shoulders. Every time a prospect is faced with a buying decision, the mind almost instantly starts resisting.

  In my consulting practice, I charge high fees for an incredible ROI. I also offer a strong guarantee. If we have not met the mutually agreed-upon objectives, I’ll consider working until we do. If we are still unable to meet the mutually agreed-upon objectives, I will refund your entire fee in full. By the way, if you’re reading this now and want to see how I can help your business, that’s a pretty remarkable guarantee! You’d be foolish not to put the book down and call or e-mail me right now...just saying.

  But the guarantee removes all the risk from my potential client’s shoulders and puts it all on mine. Marshall Goldsmith is the most well-known CEO coach in the world. A coaching assignment costs over $250,000, but Marshall allows you to pay at the end of the assignment, only if positive change has occurred. The catch? The client being coached doesn’t decide if positive change has occurred, their key stakeholders do. This might include a wife, a spouse, coworkers, or others. Marshall is confident in his approach. I’m confident in my approach. How confident are you in your approach?

  Guarantees work because they indicate that you’re incredibly confident in your products, your services, their performance and quality, and your ability to service and delight the customer. It’s not much more complicated than that. But if you also remove the investment risk, it makes things a heck of a lot easier for your prospective clients.

  For example, the Lands’ End guarantee reads as follows:

  GUARANTEED. PERIOD.®

  The Lands’ End guarante
e has always been an unconditional one. It reads: “If you’re not satisfied with any item, simply return it to us at any time for an exchange or refund of its purchase price.”

  We mean every word of it. Whatever. Whenever. Always. But to make sure this is perfectly clear, we’ve decided to simplify it further: Guaranteed. Period.®

  It’s more than a return policy. It’s a promise we’ve kept for over 50 years now, to stand behind every product we make and every service we deliver.

  Now that’s what I’m talking about! The key objective here is simple. By taking away the risk of the transaction, you reduce resistance and make it easier for the prospective customer to say “yes.” That doesn’t mean you use risk reversal or guarantees in place of a remarkable customer experience. Creating value isn’t just about giving more; you create value by reducing resistance and buyer’s remorse for your client. I guarantee it.

  Action Step: Satisfaction Guaranteed

  What type of guarantees are you offering? How could you remove the risk for your customers? What is the leading cause of resistance for your customers? What objections do you hear most often from your customers?

  Step 1: Ask yourself, what are all the risks involved for the customer when buying from us? Sometimes it’s easier to ask your customers what they’re feeling. For example, are they concerned they won’t like the product? If they having pricing concerns, ask yourself why this is—is there a competitor who offers a similar product at a better price? If this is the case, you might need to be asking what you can do to differentiate yourself from the competition. What are your customers afraid of? Are they concerned the product might break? Are they concerned they might not like the product or change their mind? This will help you better determine the type of guarantees your company should offer. List every objection, fear, and concern the potential prospect might have. Be prepared to answer them, and then back them up with your guarantees.

 

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