Where Does Your Client Loyalty Stand?

Are your clients loyal to you and your firm or to their bottom line?  Donny Deutsch, host of CNBC talk show The Big Idea with Donny Deutsch and author of Often Wrong, Never in Doubt said in his book that, “In advertising, client loyalty is to the bottom line, not to the supplier.”  I am inclined to think that this is true in most industries.  Suppliers of financial services, raw materials, lodging and any other commodity can be replaced.  As Deutsch said, “The buyer can find it down the street better, cheaper, packaged more seductively, and you’re gone.”  To prevent mutiny suppliers will often offer discounts, incentives, terms, promotions, and loyalty programs to increase sales.  In response to this Deutsch asks, “How valuable is your product if you’re willing to discount its value?” 

 Regularly discounting products and services for short term gains may only work in favor of the supplier.  After all, do consumers really want or need to increase their inventory levels just because their supplier is discounting its products or services in an attempt to benefit themselves? Probably not, but consumers can sense desperation and will consume according to their best interest. 

 To break this downward discount cycle firms would benefit by developing mutually beneficial relationships with consumers.  A firm that charges a fair price will not need to discount.  Granted this means for a superior product or service a superior price is justifiable. However, the consumer should never be gouged as this would not be mutually beneficial.  By creating mutually beneficial relationships consumers will come to trust their suppliers and develop a loyalty that transcending a temporary discount.

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