Loyal Customers Are Made, Not Born

According to Harrison, there are three types of customers: occasional buyers, habitual buyers and loyal customers.

Occasional buyers shop around on every purchase, while habitual customers shop out of habit — they buy from a particular distributor because they always have. The danger with habitual buyers, however, is that the relationship will not survive a mistake. And, as Harrison points out, “We’re human, and sooner or later we’re going to make mistakes.”

At the same time, he believes distributors are often to blame for perpetuating come-and-go customer relationships.

“A lot of that behavior is directed by the vendor, not the customer,” says Harrison. “When we treat a customer like they’re going to come and go, it’s a self-fulfilling prophecy.” 

In reality, he says, occasional and habitual buyers represent a tremendous opportunity for distributors, because sales reps can convert them to the next level of customer: the loyal customer.

Jim Pancero, a sales and sales leadership expert in Dallas, echoes this sentiment.

“My strategy is to treat every customer as a long-term relationship, even on the first order,” he says. “I actually do more research than normal every time I get a new client. I need to do a profound job with them, because I cannot predict when it’s going to turn into a longer-term relationship.”

So what does this ideal customer relationship look like?

Revenue aside, Truitt defines the ideal customer as “someone who values us as a business partner and needs our products, services and expertise as a key part of their solution.”

Similarly, Mike Holland, sales manager for Brame Specialty Company, Durham, North Carolina, describes the ideal customer as “one looking for a vendor partner that’s not only going to provide quality products, delivery and service, but that’s going to bring them new products and ideas that help them become more efficient and service their customers better.”

The key takeaway: Distributors need to make themselves indispensable to their customers’ businesses to win and retain their loyalty.

And the first step toward achieving that goal is through education, says Crisafulli.

“Distributors should spend more time on come-and-go customers and put forth the effort to change their thinking and create an educated buyer,” he says. “So many buyers are just price conscious. That’s how we pick up the business. But once we get our foot in the door, we can show them the difference between buying on price and buying on overall cost, and we can start to change their mind-set.”

Crisafulli admits that educating buyers also has inherent risks.

“Once you create an educated customer the risk is you make them too smart, and someone else can come in and take their business,” he says. 

To avoid this scenario, distributors need to continually impart their value to the customer and become an integral part of their business. Truitt refers to this process as increasing the “divorce cost.”

“You have to find a way to become a valued resource to them,” he says. “Once you’ve become a part of their team, then you’ve sewn yourself into the fabric of their business. And if you increase your value, then the divorce cost for the customer is too high.”