Archive for February, 2008

The Loyalty Chasm

Can you hear it?chasm

It’s the sound of plummeting customer loyalty.

Much akin to a five-year old’s adventures with his matchbox car on the kitchen table, customer loyalty can mirror the follies of a Daytona 500 “wanna-be”. The miniature Formula car cruises along on the flat plane of Formica at the mercy of the next Dale Ernhardt, Jr. (in his pajamas). The car reaches the table’s edge. Its fate is clear. With increased adrenalin and a face filled with intensity, the future Nascar driver let’s gravity pull the #88 car to an abrupt meeting with the linoleum tile.


Damage assessment? It’s just a minor scratch on the headlight; so he picks it up and repeats it no less than 100 times (you know boys).

Unlike matchbox cars, when customer loyalty drops off the table, the damage assessment reveals a lot more than a scratched headlight, but often goes undetected.

So what causes this drop into the “loyalty chasm”?

It’s a trickle-down effect that starts in the boardroom and ends with a severing of the sales rep/customer relationship.

A publicly traded company anxiously awaits the analyst’s reports and their shareholders’ response to quarterly performance numbers. If reports are favorable, and the stock ticks upward, high fives and a free round of drinks for everyone. If the reports go the other way, panic sets in. “We’re going to have to make some mid-year ‘adjustments’ to get back on course.” After numerous closed-door emergency meetings, a new strategy emerges, press releases go out, re-organizations ensue and heads get chopped. It’s called “Quarteritis”, the illness of leading and being led by Wall Street’s reaction to quarterly performance.

Bad news from Wall Street often equates to draconian measures, such as drastically changed sales compensation plans, territory re-alignment and hiring freezes (even for replacement positions). All these chess-like moves are designed to improve financials for the next quarter, often in direct contradiction with the firm’s core values.

It’s like turning around a battleship in a creek. If you turn too fast and hard, some passengers fly off the side…and some will jump off. Employee morale and trust erodes, triggering undesired turnover. When reps change, the loyalty chasm opens, helping to surface the last symptom of Quarteritis, a precipitous drop in customer loyalty.

Gee, didn’t think you might lose some high performing reps along with those marginal reps in those closed-door meetings?

Didn’t think how those decisions would impact morale and employee trust?

Didn’t think the loyalty to your company, that took months, even years to build is all but gone the day a customer learns their rep is no longer servicing their account?

Didn’t think that the customer has already starting thinking about their alternatives?

Didn’t think.

Publicly traded companies may want to think beyond the next quarter and give more weight to each decision that affects rep/customer relationships. Failing to do so, equates to saying, “c’mon, it’ll just be a scratch on your headlight.” From the customer’s perspective, it feels more like a hit and run.


February 19, 2008 at 2:43 am 1 comment

A Slam Dunk Lesson on Trust

College Park, Maryland; January 16, 2008 fans

Maryland Terrapin fans had a lot to cheer about this week.  No, I’m not talking about last Saturday’s upset of #1 North Carolina on the Tar Heels home turf.  Another shocking victory delighted the 15,000 plus fans during their game against Wake Forest last Tuesday.  I had the great fortune of witnessing this historic event.  Ironically, it happened when both teams were in their locker rooms at half-time. During the break, fans experienced the now typical, parade of carnival-type contests designed to delight the student body while relentlessly promoting products. 

For example:

The Papa John’s Pick-the-Prize-in-the-Pizza-Box Contest.

The Pepsi One Half-Time, Half-Court Challenge.

The Chevy Chase Bank Spot-the-Most-Ridiculous-Looking-Fan-Scan.

You get the idea.

While most people were settling back into their seats, the PA announcer introduced student contestants for the Pep Boys Fan Challenge. These two young men were competing for a year of free windshield washer fluid.  I couldn’t make this stuff up!  Regardless of where you sat that night, any fan could tell that both competitors had enjoyed their share of super sized Pepsi’s and grande nacho cheese tortillas.

The winning contestant would need to complete a “speed drill”.  The goal?  Dribble the ball from under one basket to the foul-line and back, then to the half-court line and back, then to the other foul-line and back, and finally to the far base-line before finishing with a successful basket.

The labored breathing started for both men as soon as they hit the first foul-line.  As they reached the half-court line, one appeared to glance upward to see if an oxygen mask would mercifully drop from the Jumbotron.  As they headed for the final turn, one warrior had gained, what they call in football, separation, from the other – nearly the full length of the court.

At this point, fans started to cheer.  Not for the apparent victor, but to support the guy who was grasping onto hope…just to finish.

Then it happened. 

The contestant who was gliding to an easy victory slowed down about eight feet in front of the basket, got down on all fours, and waited for his competitor, a complete stranger, to approach.  As the athletically-challenged straggler huffed and puffed his way toward his competitor, he saw the offering of a human trampoline in front of the basket.  Hands and knees now firmly planted on the hardwood floor, the first contestant pointed up to his own back.

The anticipation and noise level escalated as he neared with slow motion speed.  Without breaking stride, the newly anointed crowd-darling picked up steam, took a final dribble, jumped on the back of the first contestant and slam dunked the ball to an erupting Comcast Center crowd.




Both men hugged and held each other’s hand in the air in victory as the video camera sent their image to the arena mega-screens.  The Terps went on to win the basketball game; but, these men were the real victors that night.

So what’s the lesson for us?

By humbling ourselves and not seeking the spotlight, we build trust. 

By giving credit instead of taking it ourselves (especially when we can), we build trust. 

By doing what is unexpected, unnecessary and unselfish, we build trust; capturing the hearts of everyone in our arena.  The one-year supply of windshield washer fluid is just a bonus.

February 9, 2008 at 11:42 pm 2 comments

The Invisible Wall of Distrust

You can’t hear it.
You can’t touch it.
You can’t even smell it.

But make no mistake; it’s there…the invisible wall of distrust.
Your buyer knows it’s there and sees it with perfect clarity. It’s the elephant in the room that they rarely tell you about. One brick at a time, year after year, it was built with the mortar of false promises and layers of incompetence.

MBA students in my Sales Management and Strategies course at Loyola are fairly reserved. When I asked them to think about the perceptions they have of sales people, hands started flying toward the ceiling. “Dishonest”, “money motivated”, “interested in making their quota”, “don’t listen”, “don’t follow through”, “talk too much” and the list goes on. Suddenly, they all found their voices at once. More proof the wall exists.

Trust, as Stephen M.R. Covey calls it, is the one thing that means everything. Without it, friendships dissolve, marriages deteriorate, communities divide and governments fall. On the other hand, high trust relationships strengthen people, teams, organizations, cities and even countries. In the business world, sales people who seek trust centered relationships will experience a road less traveled; but, find it a worthwhile journey.

So how do most sales reps deal with the wall? Here are a few ways for starters:
• They are unaware it exists. (Not after reading this).
• They ignore it.
• They shift blame (not my fault, the last rep did that to you).
• They go around or over it (a great way to turn the wall into a fortress).
• They lower their price (sorry, it’s still standing tall).
• They delay or procrastinate.
• They give up.

The wall exists because sales people inside and outside of your industry have violated the same basic principles that I call the five pillars of TRUST. So what are the principles?

Transparency – Have no hidden agendas. Don’t say your product can do something you’re not sure it can do. Be upfront about anything and everything that the customer could perceive as a “surprise”. Someone once said, “It takes twenty years to build a reputation and five minutes to destroy it.”

Reliability – Making promises that you keep are trust deposits. Making promises that you break, are at best withdrawals and at worst, overdrafts. Follow through on your commitments. According to a recent study published in the Harvard Business Review that rated the biggest mistakes sales people make, one in five reps fail to follow through.

Understanding – According to that same study, one in five sales reps don’t listen to customer needs. “First seek to understand, then to be understood”, says Dr. Stephen Covey. From my twenty six years in the sales arena, too many reps “show up and throw up”, dumping irrelevant information and experience. Listen, listen and then listen. Instead of thinking about what you want to say next, try clarifying anything you’re unsure about. Then understand the impact to the customer.

Sincerity – Show the customer that you care. The old saying, “people don’t care how much you know, until they know how much you care” still rings true. Be honest and genuine – they can see through the invisible wall and they can also see through insincerity. What can you do tomorrow to show your customers that you are sincere?

Transform – When you’re viewed as a “me too” supplier, the only way you can provide value is to lower your price. That’s a pattern that leads to nowhere. Instead, bring your customer to a new place. Help them uncover a need that no one has revealed to them and then lead them to a desired outcome.

Putting the five pillars of TRUST into practice help you breakthrough the wall of distrust. And trust is everything.

Mark Slatin helps organizations attract and retain loyal customers through trusting relationships. You can learn more at

February 9, 2008 at 11:09 pm 1 comment

Free Medium Coffee

free medium coffee

What did the new Dunkin Donuts store owner do right? The sign says it all…”Free Medium Coffee”. Do you think he drove traffic to his new store? Lots. I had to look twice at the second line; “No Purchase Necessary.”

That’s different.

Free just feels different.

New businesses offer discounts, coupons and rebates all the time. They imply, “We’ll give you a good deal if you come check us out.” Free, on the other hand, says, “We’re willing to invest in a relationship with you and know we’ll need to earn your business.”

Now flip it. How obliged do you feel after hunting for the coupon, clipping it out, sorting it by category and then remembering to use it before it expires? You feel like they owe you the coffee, don’t you? At best coupons and other promotions offer a balanced exchange; at worst, buyers feel distrust about the process. How much pain have you felt due to coupon or rebate issues? One study suggested that 50% of all rebates never get turned in. OfficeMax received accolades for bidding farewell to rebates in 2006 and Best Buy followed last year on many products.

Now let’s look at the first three days since the sign went up:

Day #1 – On your first visit, you look around as you approach the counter with caution. Suspicious of a catch, you place your order, “I saw your sign and I’d like a free medium coffee.” When the person on the other side of the counter smiles and promptly pours your Dunkin Decaf, you wonder if the other shoe will drop. When you realize there’s no string attached, they just went from stranger to friend.

Day #2 – You know you’re getting a donut with the coffee. Why? Because you feel a strange sense of gratitude for a second cup of free coffee. I bet you never felt a sense of appreciation after using coupons? (By the way, after day #1, you told at least three friends about the free medium coffee because you like to give away free stuff too, even if it’s someone else’s).

Day #3“Dunkin Decaf, cream, no sugar Mr. Slatin?” says the lady in a pink and orange uniform. “Thanks for remembering Janice, let me also get a half dozen glazed and a half dozen with sprinkles, an egg, bacon and cheese croissant and a box of munchkins.”

What just happened?

The seller created value by giving you something without expecting anything in return. Did he have a previous relationship with you? No. But now he does. He changed the feeling you had about his product or service from neutral to positive. Warm fuzzies. Why are warm fuzzies important? Well despite popular belief – all decisions are based on emotion and justified by logic. Dunkin Donuts went through your mouth to get to your heart. What’s your “free medium coffee”?

February 9, 2008 at 10:47 pm 2 comments

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