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3 Reasons Why Sales Should Care About Customer Loyalty


Quiz time: What type of sale would you prefer your team to close?

  1. Any sale (we need to meet our acquisition goals no matter what).
  2. A high-profile sale that brings in a huge chunk of revenue upfront.
  3. A small or large sale that continues to build in value.

If you answered with anything other than C, then it’s time to dig deeper.

For years, acquisition has been the main focus of both sales and marketing. New sales show immediate company and revenue growth to investors, and closing a high-profile account sounds much sexier than keeping the ten customers you currently have.

But what happens when you lose current customers just as fast you close new ones? Rising acquisition costs, lower recurring revenue, poor brand image. Customer loyalty and retention tend to be treated like a red-headed stepchild sitting in the corner; because it takes longer to see the results of customer loyalty, we ignore the proven benefits of keeping a customer over acquiring a new one.  

Sales needs to think of each acquisition as a starting point to long-term company profitability, rather than the ending point of their role. Why? For three reasons:

  1. Not all sales are equal in value

Every time a sales rep makes a sale, there’s an acquisition cost. To use a well-known statistic from Bain & Company, it can cost up to 6 times more to gain a new customer than it would to retain an existing one. In a report released just last month, 82 percent of businesses agree that retention is still cheaper than acquisition.

We’ll always need sales to bring in fresh deals to grow the revenue stream, but thinking in terms of quality sales—instead of only quantity—will bring greater long-term value to a company. If you’re going to spend sales time and resources closing a deal, it’s incredibly important to get the most out of it by making sure the customer has all the right qualifications so the deal lasts. Closing a sale just to meet goals can be short-sighted; the company’s bottom line takes a big hit when customers only stick around for a few months at a time.

  1. Provides opportunities for upsells and cross sells

When a sales rep stays in contact with a customer, it opens the door for additional revenue streams. Consider this statistic from the Gartner Group: 80 percent of your company’s future revenue will come from only 20 percent of your current customers. For many companies, customers are still an untapped revenue source.

Since your rep has already invested resources to build rapport with the customer, they have a much higher chance of converting them on new services or add-ons. Compare the probability of converting an existing customer to new revenue streams versus new prospects: Customers are 60-70 percent likely to close while a prospect is only 5-20 percent likely.

With that in mind, consider structuring your sales team to focus on both new sales and upsells. Upselling is often left in the hands of customer service or marketing, but with the relationship advantage that sales has, it makes sense to have reps continue their relationships with customers to nurture customer loyalty and drive additional customer revenue.

  1. A buyer can bring in new sales

I saved the best point for last. When sales nurtures a relationship with the individual buyer, not just the organization, it can have far-reaching benefits.

I’ll use Tellwise as an example: Our sales team heard from one of our users that she was moving on to a new company. Happy with our product and service, she made a point to tell us she would be reaching out from her new employer to introduce the product to her new team. Because we value building long-term relationships with customers, we had a new opportunity with goodwill already built in.

Imagine a world where your customers are so thrilled about your product or service, and have such a good relationship with your sales team, that they’ll reach out on their own as they move from employer to employer. That’s the benefit of customer loyalty in a nutshell.

Think long-term results

If you want a team that’s invested in long-term results, it’s time to reevaluate your team’s structure and processes. Jerry Jao from Retention Science suggests doing three things to achieve change: redefine how customer value is measured, understand the need for data-driven technology in all your customer interactions, and reset processes from the top down.

Jerry closes his article with a plea for an overall change in business leadership thinking: “Company-wide restructuring is a drastic but necessary measure for true success in customer retention. If every acquisition is a short-term sale that ends the moment the customer completes a purchase, retention is a long-term investment.”

How does your sales team think about customer loyalty?

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