As a coach, I work with people in a number of different types of positions, including salespeople. One of my salesperson clients was excited about a large sale lacking only the signed contracts in order to be complete. The only remaining obstacle was the customer’s stipulation that the contract be in his hands by noon on a specified day.

The order in question was complex and spanned several company functions. My client could not prepare the contract alone. Accordingly, my client notified the proper person, who worked from a geographically removed location, a week in advance of the specified day, and simultaneously provided all of the information that the contract-preparer needed in order to complete the paperwork - including the fact that it had to be in the hands of the customer by noon on deadline day. Four days prior to that day, my client called the contract guy to ask how things were coming along and reminding him that they must have the documents in the hands of the customer by the deadline. Contract guy reported progress and no problems.

My client’s manager, the sales manager at the company’s local office had been involved in the sale from the beginning. This manager called contract guy as well and reiterated the need for delivery by the deadline; in addition, the sales manager had called contract guy’s manager, who was a regional sales manager, to tell him about both the order and the deadline. Both sales managers got overrides on sales people’s commissions, so both of them had financial, if no other, reasons to see the sale close. Both managers received assurances that the documentation would be delivered well in advance of the deadline.

The calls were repeated on each day leading up to the deadline. Assurances were given. My client had still not received the contract on the morning of the day specified. Urgent phone calls flew back and forth between my client, his manager, the regional sales manager and, of course, the customer.

Alas, you already know the ending. My client did not receive the documentation on time; it arrived by fax at 5 pm. The customer terminated the sale and his relationship with my client’s company. He probably reasoned, justifiably, that a company which couldn’t meet a deadline in order to secure a large sale would also probably not be able to complete the contract in which he was prepared to invest a great deal of money. He awarded that large contract to a different supplier. My client was angry, demoralized and demotivated at that point.

Everyone involved lost something that they otherwise would have gotten:

• the potential customer lost all the time invested in discussion with the company representative and, potentially, the benefits of the company’s products and services,

• my client lost both a substantial commission as well as the time spent in working out a solution to help the potential customer meet a unique challenge

• all managers lost their shares of the commission and the respect of the sales people who reported to them

• the company didn’t get the money from a sale it might otherwise have had and tarnished its reputation in the bargain.

• finally, the other sales reps learned that their own company was the biggest obstacle to their success.

I don’t know what subsequent actions the managers or other company officials took, if any, to ensure that the experience was not repeated at other times and in other places in the company’s nationwide operations.

My client went elsewhere.

Although there are many mistakes evident in the incident described above, the single biggest mistake from a customer loyalty perspective was that its leaders viewed the concept of customers tactically and too narrowly.

The leaders of all excellent companies know, articulate, and act on the principle that there are many customers and customer relationships inside their organizations in addition to those external customers who purchase their goods and services: Employees are customers of the organization. Employees are each other’s customers as well, since they depend on each other to do the company’s business. If employees fail to create loyal customer relationships to other employees, those closest to the end user will very likely be unable to deliver a superior product or service to end users consistently.

Loyal customers repeat their purchases, recommend products and services to others, and forgive the occasional; in short, they trust the organization to deliver on its promises. Customer loyalty, like trust, is built up over time and can be destroyed in an instant. Actually, it is trust: trust that a company respects and values them and demonstrates it with every interaction.

The tale told above resulted in unintended learning experiences all the way around. The spurned customer told his colleagues - other high-level potential purchasers - about his experience. They told their friends and colleagues. The company’s already-clouded reputation acquired more blemishes, and its salespeople lost the opportunity even to approach these other potential purchasers. All of the salespeople in the local office including the sales manager learned that their own company made their jobs more difficult, if not impossible; the experience reinforced their sense that the number one reason they had difficulty making sales was the company’s reputation for poor performance. A number of them left immediately.

The company probably went a long way toward creating customer loyalty - to one of its competitors.

Jeanette T. Wallace, Ph.D.
jeanette@leadership-works.com
http://www.leadership-works.com
314.772.7727

Jeanette Wallace, Ph.D., the president of Leadership Works LLC, is an organizational psychologist based in St. Louis, Missouri. Briefly stated, her firm’s mission is to help people and organizations get out of their own way as they move towards achieving goals. She has a terrific individual and/or corporate coaching practice aimed at getting improved results both personally and organizationally. She coaches executives as well as individuals. She takes a process approach in her work and appreciates the strengths that clients can leverage in turning potential into performance and helps clients recognize and use them. She offers processes specifically focused on leadership, strategic planning, customer loyalty and both individual and organizational assessments.

Jeanette is an expert facilitator. She has practiced organization and human resource development for 25 years as both an internal and an external consultant to executives and managers of companies in a variety of industries.