The best firm leaders know that they’re not really in the numbers business, they’re in the relationship business.
INSIDE Public Accounting recently heard James Kane, a loyalty researcher and consultant, discuss ways business leaders can cultivate and maintain an unbreakable bond with their clients and staff. Kane blends the worlds of business, neuroscience and behavioral psychology to produce a presentation that made us realize that some of our assumptions about what makes people loyal were dead wrong.
Intrigued, we wanted to learn more and to share his findings with attendees of the annual PRIME symposium, which is scheduled for Nov. 3 – 5 at the Conrad, Indianapolis.
To whet your appetite, we asked Kane to answer a few questions on loyalty.
Q: What’s the biggest mistake professional service firms make in trying to build loyalty?
A: There are two, really. The first is an expectation of most organizations and most people that they deserve the loyalty of their clients. They assume that “doing their job” they were hired to do should be enough to earn them the benefits of a truly loyal relationship and can’t understand – in fact, are often hurt, offended or angry – when those clients consider other options, question fees and contracts, bid out work that was once exclusive, or question the value they receive. Firms fail to understand that offering a great service and a fair price is exactly what their clients hired them to do. Meeting an expectation alone does not create loyalty.
The second mistake organizations make is thinking they can buy or manipulate someone’s loyalty. The word loyalty has been hijacked by marketers over the years and associated with sales gimmicks like rewards programs. The idea is that if I can offer you enough “stuff” or make you so dependent on the product or service I provide that you will be loyal. But that is like saying a hostage is loyal to their captor or an addict is loyal to their dealer. The behaviors may look similar to loyalty, but the outcomes are much different. When a hostage escapes or is set free, or when an addict gets sober, they don’t return to their captor or dealer. They don’t advocate for them, encourage others to get involved with them, forgive them for what they have done, or provide them with more opportunities. They get as far away as possible, say bad things about them, and wish the worst for them.
Loyalty does not come from trying to manipulate or change the behaviors of others. It comes when you change your own. When an individual or organization is willing to learn and communicate the behaviors that cause other to be loyal, they can build nearly unbreakable relationships.
Q: How about internally? Does your staff need to be loyal to the organization before the firm can expect clients to be loyal?
A: So, it is important to know that from both a neurological and physiological standpoint, human beings are conditioned to be loyal. It is a response that has been evolving inside of us from the time we started living in social groups and communities. Our brains have learned to recognize not only who we can (or should) trust, but also who has our best interests at heart. In other words, our brains know who to be loyal to and seek out, both consciously and unconsciously, the clues and behaviors from others that tell it when it can be.
Those clues and behaviors come from a variety of sources, so when a client’s brain is “deciding” if it should or can be loyal to a particular firm, it will look at the entire firm, not just a single individual. They will evaluate everyone they come in contact with, every message they receive, every interaction they have – personally and virtually, and determine if the relationship warrants its loyalty.
To accomplish that, firms need to create and maintain a culture that communicates those loyalty-causing behaviors as a whole. It is a lot like raising children, As a parent, you know you can’t be with your child 24 hours a day, seven days a week for the rest of their life. Eventually, they will start creating their own relationships and establishing their own connections. The most you can do as a parent is instill in them the values you believe will make them successful and teach them how to treat others. When you do a great job with that, the result is that your kids develop relationships with others that make you proud, and are a reflection on you. The same is true for an organization and its employees. When you teach and support and reward and encourage the behaviors you want them to display, you will get the desired results in return.
Q: How can an accounting firm start the process of building an “unbreakable relationship” with their clients?
A: The first step is accepting that there is no magic pixie dust that you sprinkle on clients to make them loyal. If you want loyal clients you have to be willing to change your own behavior and the behavior of your entire organization. That is a commitment that not all firms are willing to make and prefer to operate under the illusion that what they have been doing all along has worked fine, and there is no reason to question the way they operate or build relationships.
The next thing they need to do is assess their current relationships – not by asking them if they are satisfied with the service being provided – but by determining their client and employee loyalty. The most important benefit to come out of our research is that we have been able to identify, not only the state of an existing relationship, but the precise cause of that state. For example, it is interesting to know that a particular client sees their relationship with a firm as transactional. But the really useful information is understanding why the see it that way. What is causing that client to feel that way? What is shaping their perceptions? What is the firm doing or not doing to prevent a deeper relationship from forming? When a firm can identify the specific behaviors that are impacting the relationships, it can develop strategies and tactics to properly address them.
Finally, they need to commit to a loyalty strategy. It is easy to forget about the relationships that are important to us when they get too hard or become too much work. Think about the personal relationships you have had throughout your life. So many people form their closest relationships with friends they make in high school or college. They share their deepest secrets with one another, their goals and desires, their hopes and concerns. They are inseparable…until graduation. They keep in touch, still take vacations together, are in each others weddings, still talk and reminisce about the “good old days,” but before long their lives go in different directions, the things they shared and had in common are replaced by new friends and new experiences, and those people who at one time were the most important in the world to one another are reduced to exchanging Christmas cards once a year.
Client relationships often follow a similar path. Maintaining relationships require work. They demand a diligence and attention that doesn’t occur automatically.