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What Drives Client Loyalty?
Several years ago I was in the midst of a long-term engagement with a CEO who suddenly received an attractive offer to sell his company. After several weeks of negotiations, it appeared the deal would go through. That morning my client pulled me into his office for a talk. I was, in truth, a bit nervous: the company owed me some money for past work, and we had a signed contract for services that extended several months into the future. A change of ownership could throw everything into disarray!
"Andrew," the CEO began, "I just want you to know that if this deal goes through, I've arranged for you to be paid for the work you've already completed – I don't want that to fall through the cracks, which it might; I'm going to ensure that you are treated fairly." He then added, "I have already spoken to the chairman of our new potential owners about how much you've helped us and suggested he meet you to see if you could be a resource for the combined entity." I breathed a sigh of relief and thought to myself, "Wow, this guy is sticking up for me – he's loyal!" In truth, it was a wonderful feeling – and one that we all wish we might experience more often.
When I set out to write my most recent book, Making Rain, I started to wonder: What is client loyalty, really? People certainly talk about it a lot – there's employee loyalty, brand loyalty, customer loyalty, and, for this discussion, client loyalty. The conventional wisdom about what inspires loyalty for products or companies, however, isn't all that relevant for professional-client relationships: the reasons why we're loyal to a brand of toothpaste or to an employer are somewhat different from those that compel a client to demonstrate loyalty to a professional who is providing a complex service or sophisticated product.
Based on hundreds of interviews I've conducted on this subject with both senior corporate executives and individual advisors, and it’s clear that there are three main drivers of client loyalty:
The degree of trust you develop
Going the extra mile
Let's look at each of these in turn:
VALUE ADDED
First, a client's loyalty is tempered by how much value you've added. Generally, adding value means improving your client's business condition: helping her to solve problems, achieve personal and business objectives, and get critical work done. Keep in mind that there are three types of value you have to add: · Core value: this is what you explicitly contract to do for your client. If you don't deliver on this, you're in big trouble.
- Surprise value: Surprise value is when you identify and solve problems that aren't part of your contract. It's when, in the course of your work, you help your client out in unexpected ways that add value.
- Personal value: Every client you work with gains something personal from the relationship. Robin Bidwell, who is the chairman of the global consulting firm Environmental Resources Management (ERM), sums this up very well: "Different clients value quite different things. One client of ours most valued our ideas and intellectual capital, and was constantly spending time with our consultants and sitting in on workshops. Another wanted to feel important, and we had to treat him like a V.I.P. Yet another wanted personal coaching, and was constantly asking us for feedback and suggestions. You've got to figure this out right at the start if you want to be successful."
TRUST
The trust a client reposes in you will depend on several important factors. First of all, do you have integrity? Integrity is when you consistently adhere to a set of sound values or ethics, you are honest, and there is a wholeness or an "integral" quality to your behavior. Integrity also implies reliability and discretion – you follow through on what you say you'll do, and you assiduously keep client confidences. Second, trust is based on a client's perception of your competence to do a particular job. I might trust a babysitter to take care of my children for an evening, for example, but not to take them on a three-day rafting trip. Similarly, a client has to feel that you or your company has the skill to effectively tackle the job at hand. Third, a client's trust in you will depend on whether you are focused on your own agenda (you have a self orientation) or on his agenda. Finally, trust is also based on knowing each other personally – on some degree of intimacy and "face time." We need first-hand experience with an individual in order to sense whether there are shared values, personal chemistry, and mutual respect.
Dan Scharre, the CEO of telecommunications equipment supplier Larscom, highlighted this element of trust when I asked him about his loyalty to various professionals: "I look at their ethics," he told me. "The professionals I'm loyal to demonstrate the highest standards of ethical behavior. Yes, they have to do a very good job, but if they don't have integrity, it doesn't matter. They have to honestly represent their capabilities to me and follow through on what they say they'll do, every single time."
THE EXTRA MILE
When you set aside your own interests and do something extra for a client – when a client perceives that you have helped him in some out-of-the-ordinary way and gone the extra mile – then loyalty grows.
The extra mile can be represented by many different gestures and acts, and sometimes they have little to do with your formal contract with a client. As Steve Pfeiffer, chairman of leading law firm Fulbright & Jaworski says, "If you leave your vacation a day early to help a client meet a critical deadline, it shows you're dedicated and you care, and this builds loyalty. On the other hand, I have counseled several clients' children on the college application process, and helped them find and get into the right school – this has nothing to do with the business aspects of the relationship but everything to do with the human side. It’s appreciated and valued."
If you can add great value, build both professional and personal trust, and go the extra mile for your clients, your reward will be long-term client loyalty. Loyalty, of course, doesn't mean that a client will do business with you when she doesn't need your services, or choose you over others she thinks are more qualified for a particular task. Dan Scharre, the CEO at Larscom, says this about what loyalty does mean: "For many years I've had a good relationship with a very effective sales trainer. Recently, he's spoken to me several times about doing some work for my company, but it's really not the right time for the kind of service he offers. I feel loyalty to this guy, but that doesn't mean I'm going to hire him when I don't have a real need. In the last few months, however, I have strongly recommended him to three or four other executives at other companies. Later this year, when the timing is better, I will probably hire him to do some work with us."
What more could you ask for? So add value in multiple ways – core, surprise, and personal. Build trust. And go the extra mile for your clients. If you do these things consistently, the loyalty you experience will grow.
Andrew Sobel is the leading authority on client relationships and the skills and strategies required to earn enduring client and customer loyalty. He is coauthor of Clients for Life: How Great Professionals Development Breakthrough Relationships (Simon & Schuster). He can be reached at (505) 982-0211 or by e-mail at andrew@andrewsobel.com www.andrewsobel.com
Published in Networking Today, September 2003.
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