Increase Sales Blog

Within the SMB world, the argument of who owns the customers loyalty continues to surface more and more. There are many entrepreneurs who started their small businesses built upon their relationships with their customers.  Some of these industrious and risk taking business leaders have retired leaving their SMB to the next generation. And now the question of customer loyalty rears its ugly head. Sales Training Coaching Tip: Customer loyalty refers to both internal customers (employees) and external customers (paying buyers).

Watching the back and forth dynamics between the now second or third generation of SMB owners and their employees is amusing as well as frightening. I can hear the discussion.

Next generation business owner:”So and So customer belongs to this business and is no longer your account.”

Sales person hired by the previous generation small business owner:  ” I found this account; developed this account and was assured the account was mine by your father.”

Next generation business owner replies: “Dad is retired and I am running this business. This account is now a house account. After all the customer loyalty is to our business and not to you!”

The salesperson walks away and makes a phone call. Within 30 minutes the next generation business owner receives a call from the customer being discussed.  He hears the following:  “Your company has done a very good job in providing us what what we need. However, our loyalty is to our salesperson.  Change our salesperson and we will change vendors. The choice is yours.” Sales Training Coaching Tip:  The above conversation is an actually abbreviated version of something I witnessed.

What these second or third generation small business owners fail to realize is the loyalty from their customers (internal and external) is to their parents, uncles, aunts, or grandparents.  And the reason is simple:

People buy from people.

People do not buy from organizations for the most part.  There will always be exceptions because people are people.

They buy the solutions from people who reside in communities of other individuals who share a common goal or interest with the expressed purpose of making a profit. These solutions are predicated on the value of the relationship especially in the B2B marketplace.

I remember when I retired the outside salesman had a dickens of a time keeping customers because they had concerns my replacement would not be as competent or as focused on their needs. Yes the outside salesman had a relationship, but my inside sales relationship was far stronger.

Additionally, the relationships between the employees and the management are again between people and people. The loyalty is to the person who might have hired them; to the person who supported them during difficult times. The loyalty is not to the next generation.

Loyalty is not transferred as the deed on a piece of property or

the acquisition contract for a SMB.

Loyalty just like trust is earned.  This takes time and for those second and third generation owners, this concept of time is probably foreign to them.

To transfer customer loyalty is difficult.  The better action is to start fresh without any preconceptions or judgements by the second or third generations SMB owners.  Build internal and external customer loyalty from the ground up.

By uniting people, processes (systems) and strategies with the initial focus on the internal customer (employees) is the better solution for sustainable results respective to external customer loyalty. And the reality is many of these second generation to third generation SMB owners do not have a cohesive strategic plan; fail to communicate their yearly goals; and unfortunately continue to demonstrate poor business leadership.

P.S. If you don’t know the 3 Sales Buying Rules, this webinar on Thursday, March 7, 2013 from 12-12:30pm CST may bring greater clarity to you and your sales efforts.

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