Building Buyer Loyalty

Hello all!

The Vicious Cycle

It’s been going on for a very long time. A salesman goes into a business and offers that business low prices to switch over to their company for their offerings. And it often works!  The company changes vendors to save money and improve their bottom line.  Of course, they expect great service from the new vendor who will want to keep them.  And that new vendor will most often do their best to provide that new buyer with the best service, hoping to keep them.

Losing Loyalty

After a while, when the new vendor believes they have built up a strong relationship with the now, not so new buyer, then things change.  The vendor is pressured to increase margins, so they raise their prices with the buyer.  Over time, the buyer is no longer enjoying the low prices, and the vendor becomes more complacent about the quality of service they provide to that buyer, because their focus is on building relationships with other newer buyers.  So, the buyer becomes a bit disenchanted with the vendor and becomes an easy target for another new vendor to walk in and start the cycle over again.

Changing Your Outlook

So, how do you stop the cycle?  Well, that’s generally in the hands of the vendor.  It’s up to them to be satisfied with a level of margin that supports their needs without getting greedy. It’s up to that vendor to work hard, work smart, and work lean on employees, while still providing a strong level of service.  It’s up to that vendor to watch their costs and be able to maintain their pricing levels. And more than anything, it’s up to that vendor to always make good on their promises.  All of this will build a strong kind of loyalty that will keep your customers and stop the cycle of having to find more new customers. That means that you minimize focus on gaining new customers unless you’re growing and able to serve them just as well as your existing customers, and no better. You’ll save on advertising, and the salesman becomes more focused on keeping their customers than on finding new ones, until there is an actual need for new ones.  And the buyers are happy, so they don’t have to be susceptible to new sales people who play the old game.

Moral To The Story

What’s the moral to this story?  Treat your customers with integrity, and consistency in all ways.  Resist the more-more monster!  Be happy with making a fair living that supports your business to survive and prosper, without getting greedy.

What’s Next?

Next blog will be on pricing strategy.  That will be a good follow-up to this one!

Thank you and best regards,

Dave Johnson