Using ‘Entanglement’ to Build Customer Loyalty

Our guest author today is Michael Boyette. He is the executive editor of the Rapid
Learning Institute
Selling Essentials e-learning site and editor of the
Top Sales Dog Blog. Contact Michael via email
or connect via
Twitter

It’s a universal rule of business that you must keep your
customers satisfied to keep them around. But here’s another truth: satisfaction
isn’t enough. Satisfied buyers switch all the time. In fact, one study found
that 50 percent of “satisfied” customers are predisposed to switching
suppliers.

Here’s the problem: It’s hard to create a competitive
advantage with satisfaction alone. Buyers expect it from every supplier.
And given half a chance, hungry competitors will do everything they can to
appear more responsive, helpful and easy to do business with than you.

There is another driver of customer loyalty: the pain your
customer would feel if they were to STOP doing business with you. Research
suggests that when it comes to customer retention, these “switching costs” have
twice as much influence as satisfaction.

For some types of products and services, switching costs are
naturally high: A company uses a certain customer-relationship management
system; if it switches to another system it will lose critical data. An airline
has the only flight to Toledo on Wednesday mornings, which is when you really
need to fly to Toledo. In other businesses — such as office supplies or
commodity materials — the cost of switching tends to be low.

As a salesperson, you don’t have much influence over these
built-in switching costs.

But there are switching costs that you can influence:
the ones embedded in your relationships with your customer.

The Entanglement Strategy

Every salesperson works to create great relationships with
their customers, of course. But relational switching costs involve more than
getting your customer to like you. The key to customer loyalty is to create
“entangled relationships” that add value and become difficult for your buyer to
unravel.

Here are two ways to build satisfaction and loyalty through
entanglement:

#1 Create more decision makers

Buyers often claim to be the sole decision maker. That can
be a good thing. It’s easier to get a decision when you only have one person to
convince. But if your buyer changes jobs, moves on or just decides she likes
another vendor better, you’re out of luck.

On the other hand, multiple decision makers favor the
incumbent.
When, for example, you have five decision makers on the buying
committee, your account is often more secure because it can be difficult to
change the status quo.

Your goal: Once you win the account and become the
incumbent, seek opportunities to create more decision makers – and be
sure that all of them have a stake in keeping you around.

Find out who else in the organization has a stake in your
product or service. Ask to meet with them to find out how they benefit from
what you sell. Answer their questions and be sure they know who you are and
what you do. By doing so, you’re ensuring that the buyer’s decision has the
support of the team. But you’re also getting other stakeholders entangled in
the purchase decision. If the buyer is ever tempted to bring in another
supplier, they may stop and think. “I’d better see what the people on the team
have to say.”

#2 Training

Everybody knows that training is a pain in the neck.
Managers are never happy about pulling people away from their jobs to learn a
new product or service.

Conventional wisdom suggests that you downplay the need for
training. Make it seem as easy as possible to get things started.

The entanglement approach suggests that you make a big deal
out of training. “Without proper training, you won’t get the full value of what
you’ve bought.”

Offer to take care of both initial training and refresher
courses. Offer to train each and every group affected by your product or
service – production, marketing, customer service, sales, etc.

Work hard to make sure your training is valuable and don’t
hesitate to ask your customer’s people to work hard too. The time and effort
they invest becomes yet another entanglement. If they later decide to switch
suppliers, most of the value would be lost – and everyone would have to get
trained again.

Entangling yourself into your customer’s
business requires planning and hard work. It doesn’t just happen. You have to
look for opportunities to add value and integrate yourself and your product or
service into your customer’s everyday life. In the long run, the deeper and
more entangled your roots, the greater your customer’s switching costs, and the
lower your chances of losing a high-value account.

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6 thoughts on “Using ‘Entanglement’ to Build Customer Loyalty

  1. I’ve called your “entanglement” process strategic account management. I had one client that stayed with me for 20 years until I left the industry. I started with 6 branches for about $10K/year and grew to 60 branches and about $100K/year. All of the executives knew me, but so did all of the central office staff, all of the branch managers, asst. mgrs and receptionists. The company hired a new central office person that wanted to bring in their own guy. The branch manager objected and corporate agreed. No new guy!Great post. Thanks.

  2. Hey, strategic account management is a great term for this process. It works wonders- you can think of it as an entire organization having your back, as it was in your case. Glad to see it worked wonders for you, hopefully this will be of value to some of your readers as well!

    Thanks for the opportunity Rick

  3. Michael – Great tips. Also, consider how to bring new insights to the client. You helped them solve their initial problem, now how do you help them to get more value or solve other problems.

    One way is to continue to share good information and content specific to their situation. You can be sharing content from others – like good blog posts – or content produced by you or your company. Make it relevant and set context as to why it is relevant to them.

    In this case entangle them with insights and making you and your solution more valuable to them.

  4. Michael:
    Good ideas- but entanglement isn’t going to keep the business when the new Boss joins
    your customer and wants to make his mark. He’s going to switch no matter what the
    cost!

    Tactics employed by the sales department won’t keep the business if the customer’s new
    strategic initiative is to take the business away from you. Maybe they want to bring your
    service in-house. Maybe they want to move production to China. Maybe they want
    another supplier who’s cheaper and “just as good.”

    The owners of your company have to work to “build a moat” around your company. The
    purpose of the moat is to keep your customers “in” and your competition “out”.

    To Warren Buffet, the castle is the business and the moat is the competitive advantage the
    company has. The competitive advantage has to be something big to make a wide moat
    that will last for a long time.

    I’ve lost a lot of business that I thought I had a “lock” on. My moat turned out to be a lot
    narrower than I ever imagined.

    Warren Buffet on Castles and Moats

  5. Hi Don, thanks for the feedback- the points you bring up are what a salesperson doesn’t have influence over- the business’ “built-in switching costs.” I agree, if they are moving to China, if they are hiring in-house, there is not much you can do about it- however, as a salesperson there are preventative measures you can take to influence a decision. Salespeople should not sit back and just expect that these built-in switching costs are going to make them lose their business. What they can do is entangle themselves with important stakeholders on their side, so if the question ever does rise as to whether your buyer is going to switch, these stakeholders can have some influence over the decision. The entanglement process is a preventative measure that encourages the salesperson to make the effort to submerge themselves in a business- in turn, making them valuable. However, never is there 100% guarantee that a buyer won’t switch to a competitor. There never is…

  6. Absolutely Cliff. There are a plethora of ways to entangle your buyer- a blog is a great example of one of the ways many companies have recently been taking a dive into. Thanks for the comment, I appreciate it!

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