A client recently asked, “why is it the customers I’m nicest too wind up being the most difficult?”
He went on to describe how those same “difficult” clients were often the first to drop him for a competitor.
The answer, to paraphrase Shakespeare, lies not in our clients, but in ourselves.
Beware the trap of gifting
Taking good care of good customers is good business.
But while stopping by with donuts, giving away tickets to a game, or buying lunch all seem like effective ways to express your appreciation, they seldom deepen respect or build customer loyalty.
In fact, gifts like these usually do the opposite.
The scales of social reciprocity
I do for you. You do for me. It’s the balance of social reciprocity hard-wired in us from birth. That’s why you can instinctively sense when a business relationship is out of balance, whether you pay attention to that spyder-sense or not. When a customer’s demands exceed their willingness to pay, your gut sends you a message: things are headed in the wrong direction. Too often, your head rationalizes it away.
How to Unbalance (and Rebalance) the Scales
If a customer wants premiums without paying for them, it’s unlikely they’ll remain a customer for long. Pretty obvious when you think about it, but what may be less obvious is that the same rule applies to the flip side when you voluntarily give more than the customer does.
Undue weight on either side of the scales of social reciprocity damages business relationships: You wind up seeing them as unappreciative, they see you as a pushover.
Either way, you both lose—all because you brought donuts.
Okay, maybe that’s overstating things a little. But can you see how throwing in freebies trains your customer to expect goods and services that they don’t have to pay for?
Incentives vs. rewards
Forget incentives. Your good work should be enough. Instead, focus on rewards for loyal customers. Here’s the difference:
INCENTIVES give customers the power of decision; in this case, you give in hopes of getting business in return. Incentives also put control in the hands of customers.
REWARDS put you in control; customers qualify to receive rewards by doing business with you. Customers who qualify, therefore, belong to a select group of customers.
Since everyone wants to belong, make belonging in this inner-circle worth it.
Cut incentives, add rewards: two examples
- Instead of delivering donuts, invite qualifying customers to a private leadership breakfast featuring an expert speaker.
- Instead of passing out tickets to ballgames, invite qualifying customers to a VIP box twice a year; hire a past player to host.
Yes, incentives are more work than dropping donuts. But, these “qualifiers” put the focus where it belongs: the value to customers of a relationship with you. Rewards balance the scales, signaling to select customers that they have earned inner-circle status.
The gift that keeps on earning
A wise woman I call mom taught me long ago a timeless maxim of business: Loving customers is great. Just remember: customers are many. But, there’s only one you.
Simple math sums it up: your customers are lucky because you, my friend, are the real gift.