Customer Loyalty Has Two Accounts: Which One Funds the Future?
Personal relationships move business, from the shop floor to the corporate suite, and they yield more than any contract. Research says so. The same research says the loyalty they generate has an account holder, and the account holder can be chosen.
We are all one by Shadowschaser for Fine Acts
Selling. Walking away. This series takes the thought seriously. Six weeks, six dependencies to dismantle, one pact: an organization that runs even without you. Fourth stop: relationships.
I'll talk to them
The negotiation has been stuck for three weeks. The buyer isn't answering, the quote is frozen, the salesperson is out of ideas. Then somebody says the phrase that closes every Italian sales meeting. I'll talk to them.
Two days later the order is signed. No discount, no new conditions. One phone call between two people who have known each other for fifteen years. Sometimes the caller is the founder, sometimes the sales director. In billion-euro groups the job title is key account manager, and it's the same trade. Personal relationships move business on every floor of the building, and whoever can build them possesses a talent that produces measurable revenue. It should be celebrated, cultivated, paid well.
It should also be understood, because when we want to understand the value of our company we must be able to distinguish between the value of the people and the value of the company they work in. The discount paid by those who don't is where this series began. This stop steps outside the company's walls. The loyalty that relationships generate ends up somewhere. The question of the fourth stop is: where?
Loyalty to whom?
Robert Palmatier has studied business relationships for twenty years and is one of the world's leading references in relationship marketing. With Lisa Scheer and Jan-Benedict Steenkamp he tracked 362 buyer-seller relationships in American B2B markets, cross-referencing the answers of buyer, seller and sales manager. The result distinguishes two loyalties, separate and measurable. One held in the person's name. One toward the company.
The client gladly pays for both, but buys more from the person they know: loyalty toward the person drives more sales and more growth than loyalty toward the company. So far, a welcome confirmation for anyone with relational talent. The flip side lies in the fact that this loyalty belongs to the person, and when the person changes paths it travels in their backpack.
The difference between price and discount
On portability, the American numbers are explicit. A historic estimate on American Express clients indicates that more than 30 percent would follow their financial advisor to a new firm. The single-salesperson channel raises personal loyalty, but also the client's propensity to leave. The more exclusive the relationship, the more it yields, but also the more fragile it is.
The Italian fabric raises the stakes. According to ISTAT's permanent business census, contract work and subcontracting bind more than six companies in ten: an economy built on relationships, where the question of whose name they carry weighs double. Because relationships centered on a person, in a sale negotiation, are called a discount. Those based on a company's value are called a price.
Depositing into the company's account
Relational skill can deposit into two accounts. The same talent, two destinations. The deposit into the personal account happens on its own. Single channel, exclusive relationship, favors granted personally. It yields immediately, and accrues interest for one person only.
The deposit into the company's account requires intention. A second point of contact with a real mandate. For instance, a review with the technician in the room. Conditions managed by the company rather than granted by the personal relationship alone. A value narrative toward the client that holds even when the person telling it changes. The person remains the relationship's finest conduit.
The best key account managers in large groups already work this way. They bring colleagues into the relationship, bring the company inside it, build with their own hands loyalty held in their employer's name. In SMEs the same move counts double. The person with the most relational talent is often the one leading, and nobody has ever asked them which account they are depositing into.
The account holder exercise
Take the ten clients that weigh the most and ask a single question for each. If the point of contact changed paths tomorrow, what would remain with the company? Sort them into relationships that involve several people; relationships tied to a single person; and relationships you can't place in either category.
Then, each month, pick one client from the second family and add to the relationship one element that carries the company's signature, a second contact with a real mandate, a quarterly review with the technician at the table, a project the client could not get from any single person. The transfer has succeeded the day the client calls the new contact first.
Rent or equity
Back to the dream this series started from. Selling. Walking away. The buyer who might one day knock on the door and the you who can't wait to unplug look at your relationships today with the same question: have you squeezed maximum yield out of a company, or grown its value over time? Single-channel relationships devour the time for the work nobody can do in your place. Reading the supply chain as it changes. Designing the company's future.
At TIPIC we would suggest bringing this question to your next board meeting: if our best relationship builder changed paths tomorrow, how much of our clients' loyalty would remain in the company's name?