Summary
One of my talented colleagues says, “The sale is not won until it is referenceable.” In other words, it’s not enough to close a sale and deliver the goods. Did the overall experience meet the customer’s expectations, or did it fall short?
A diving catch or a recovered fumble is a heroic rescue that saves a project headed for disaster. The save often wins you a customer for life, so it can be easy to miss the residual damage. The damage comes later when prospects check a vendor’s references, often with long-term customers.
Ideally, diving catches and recovered fumbles are rare occurrences. It was one vendor’s norm. Their customer satisfaction metric had been a passive tracking of customer loyalty. They didn’t know prospects' calls to loyal customers often included cheerfully recounted tales of the vendor’s averted disasters. Without meaning to, loyal customers were costing them new customers. The vendor’s customer acquisition percentage grew faster once they began actively tracking and monitoring referenceability.
This is one in a series of case studies highlighting “Key Questions and Course-Correcting Quotes” taken from 20 years of B2B customer insight projects. All names are fictitious, but the situations are real. Case studies paint a picture of how important it is to learn what your B2B customers think — but aren’t saying.
These are real-world examples of how soliciting and acting on customer feedback has helped companies hold onto customers longer, grow relationships bigger and pick up new business faster.
Case Study: When Customer Loyalty Isn’t Enough
Key Question (asked of a product manager, the vendor’s chief contact in a six-figure relationship)
“Is your account manager proactive enough to meet your needs?”
Course-Correcting Quote
Product Manager: “I want everyone there to be more open and collaborative. With this vendor, there’s nothing wrong until it’s a disaster. My attitude is, the more you tell me you don’t get it, the more I learn what I have to do so that you will get it, and the more comfortable I am with the fact that you aren’t charging off down some blind alley.
"Any time vendors decide there’s something wrong and they decide to fix it, they always make the wrong choice. There’s an obsession with not upsetting the customer or not making me think they’re stupid or not making me think they think I’m stupid. There’s a lot of primordial human emotional stuff that goes on there that has nothing to do with getting the job done right!”
(This is my all-time favorite customer quote. He went on to say, “These guys take a punch well,” so he wasn’t as disenchanted as this quote implies.)
My Client’s Quandary
This vendor was always in disaster-recovery mode. Their customers loved that eventually everything turned out well, but the process exhausted everyone — customers and employees alike.
The vendor reached out to customers to see if their ineffective processes and communication were straining customer loyalty.
Conclusion
Chaos wasn’t yet costing the vendor customer loyalty, but it was damaging referenceability. When a vendor recovers a fumble, the near-loss experience can create a customer for life. However, when customers wistfully recount vendor heroics to outsiders, such as prospects calling to check the vendor’s references, those stories create doubt and become a negative reference. It’s smarter to find and fix internal processes and practices. An unqualified reference beats a dramatic story every time.
I categorize projects as assessments, investigations, treasure hunts or rescue missions. This project was an investigation. The client’s question was, “Have we damaged our relationships?”
The company took comfort in their customers’ comments about everything working out eventually. The president argued that the need for process improvement wasn’t urgent. I pushed back: New prospects doing due diligence reference checks would be put off by stories that end, “they might drop the ball a lot, but these guys take a punch well.”
Follow-up calls to a few sales that hadn’t closed confirmed that reference checks from loyal customers were costing the vendor sales. As a result the vendor improved their systems and processes. The chaos subsided, reference checks were drama-free and the company was able to re-pitch and win some of the prospects they’d lost in earlier years.
This post originally appeared on ezonearticles.com and is published here with the permission of the author.
About the Author
Ann Amati, a Principal at Deliberate Strategies Consulting, helps companies use guidance from their current and past customers to grow future sales. She has a 20-year track record of using deep-dive interviews to create positive turning points in her clients’ relationships with their customers.
In her national practice, Ann has clients who sell millions to companies that make billions and sole practitioners/LLCs with more modest practices.
Contact Ann when you want to know what your customers think. You’ll start making faster, more confident decisions.
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