Feature
The Gist
- Value over relationships. Focusing on demonstrating value is more crucial than building relationships for customer retention and satisfaction.
- Tough lessons learned. Early career experiences reveal the importance of setting boundaries and the impact of high ROI on customer loyalty.
- Retention through results. Customers stay for results, not relationships, highlighting the power of demonstrating value in customer loyalty.
The best thing you can do for your customers and yourself is to stop worrying about building relationships and start focusing on demonstrating value for customers.
The Lowdown on Demonstrating Value for Customers
This is blasphemy to a lot of customer success and customer experience folks, but it’s true! If the value isn’t being provided to the customer, a strong relationship can even hurt by prolonging the inevitable cancellation and leaving your former customer full of frustrations and complaints.
If you turn it around, though — if you’re providing strong value but don’t have a strong relationship — you might not be maximizing opportunities to expand that customer, but they’re not going to cancel. Let’s take a deeper look at demonstrating value for customers.
Related Article: Is Customer Empowerment the New Customer Engagement?
Learning From Tough Customer Service Moments
There was a situation early in my customer service career that helped me realize this. We had a client who’d been with us for a while and treated my team members very poorly. You know the type — always rude and a little bit insulting, always just a little bit away from the point where we’d cut him off. We’d warned him a few times about needing to treat people with some basic politeness.
Related Article: The Customer Service Recovery Paradox: Turn Angry Customers Into Your Company's Best Friends
Ending a Wayward Client Relationship
Eventually, on a call with one of our customer service managers (CSMs), the client used the kind of language for which we had zero tolerance. I sent him an email letting him know that he wasn’t allowed to contact us ever again. Since our product required semi-regular communication with the CSM, I offered to waive the client’s contract and let him cancel immediately.
Related Articles: Unhappy Customers Aren't Always Right; Your Customer Data Says So
Client Hires Liaison After Being Cut Off
He never responded to that email, but two days later, a woman called in to let us know that she’d be talking to us on the client’s behalf. It turned out that the day after we cut him off, he’d gone out and hired someone specifically for the purpose of talking to us!
Think about that: We told a customer we would never speak to him again, and he hired a new employee just so he didn’t have to cancel. How many of your customers would keep using your product if you told them they had to add someone new to their payroll, starting immediately?
Related Article: Improve Time-to-Market to Strike Balance Between CX and ROI
High ROI Keeps Client Despite Challenges
Here’s why this worked: The client was making an enormous return on investment (ROI) with our product. He’d come to us with a problem — that problem was that he didn’t have enough leads and he didn’t have software to manage them. We’d solved that problem for him, and now he was making money hand over fist. He was never going to leave us until he stopped making money, or some other company could make him even more money.
Client Retention: Balancing Cost and Results
When I left the company three years later, that client was still around, and the woman he hired was still talking to us on his behalf. Meanwhile, if you’ve ever been responsible for customer retention, you’ve probably had one of those calls where they say, “Look, I love you guys, I think you’re amazing, I know you’ve tried so hard to make this work for us, but we can’t justify the cost for so little result….”
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Customer Loyalty: The Power of Demonstrating Value
Here’s the thing about this story: Almost every time I tell it, people say they have had a similar experience. It’s not usually quite as dramatic as this one, of course! But nearly every time, people will say, “You know what, I’ve had some clients who hated us, and we all wished they would cancel, but they never did because they loved the results they were getting.”
If you’ve been doing this for a few years, I’m betting that some of your own experiences back this up.
I recently saw the chart below from Damien Howley, author of “Control Your Customer”:
This is a perfect summary of the issue — print it out and tape it to your desk where you’ll see it every day!
Step One: Shift Focus from Relationships
Hopefully, by now you’ve come around to the importance of demonstrating value, so how do you actually make that shift? Here’s step one, and hear me out on this: Stop thinking about building relationships. Stop entirely.
Rethinking Priorities: Value Over Relationships
The reason you need to stop entirely is that most people are so entrenched in the paradigm of building relationships that they can’t stop incorporating this. A lot of folks reading this are going to walk away thinking that my point was that demonstrating value is equally important as building relationships, even though I keep saying it’s much more important because they’ve spent so long being told that building relationships is the primary responsibility of CSMs. If you try to stop building relationships entirely, you’ll probably end up still focusing on it to some degree.
True Bonds: Built on Demonstrated Value
The other reason you should stop entirely is that the best relationships are built by demonstrating value. This is true even in our personal lives. We don’t like to think of relationships as “transactional,” but even our friendships are based on contributing something of value to each other’s lives, even if that’s just laughter or support in tough times. If you’re consistently demonstrating value to your customers, the relationship will follow because value is the most important part of a business relationship.
Step Two: Ensure Value in Every Communication
Step two is to look at every communication with your customers and ask what value is being provided in each communication. Don’t let yourself fall into the trap of saying, “Well, my company needs X and Y from the customer, so this communication has to happen anyway.” If there’s a touch that isn’t providing value to the customers, either figure out what value you can provide during that touch, or get rid of it. (I’ll go into more detail on this in my next article.)
Step Three: Revamp Onboarding With Value Focus
Steps one and two are going to take you a while — not because it’s a lot of work, but just because you have to create new habits. Once you’ve started to feel comfortable in this new value-focused mindset, you can move on to step three: going over your customer onboarding, your scripts and your templates to see where you can improve things by applying this new mindset. This is a much larger topic than we can get into here, but you can watch my talk on customer-centric onboarding if you like.
Boost Retention: Clients Praise Value-Driven Changes
If you make these changes, not only will you see it reflected in your customer retention numbers, but you’ll hear about it from your clients, too! Every time I’ve led a company through this change, it’s only been a couple months before our customers start telling us how much they think we’ve improved recently — and only a couple more months before churn numbers plummeted.
If you’re not convinced and you want to discuss this further, message me on LinkedIn, and I’ll be happy to discuss it further!