In these challenging economic times, keeping your existing customers is a sure strategy to ride the waves of instability. That’s easier said than done – but here are eight key principles to follow.
1. Dissatisfaction is the first step to losing business
Ensure that any client dissatisfaction is detected and dealt with as soon as possible. It usually takes time before a client’s frustration grows to the point of making a change, so spotting and removing potential sources of dissatisfaction as early as possible is crucial.
2. Develop perceptions of value
Senior people in client organisations must be made aware of the value you’re bringing to them. So document all the good news. If your clients don’t understand the value you’re bringing them, they’ll see little problem in changing suppliers. So – in established accounts – look for ways of drawing the attention of senior people to the benefits they’re getting from using you. Remember, these are the people your competitors will be targeting for their business.
3. Maintain and develop your network of contacts – rather than maintain links with an ageing and shrinking pool of business contacts.
In long-standing accounts, customer contacts can shrink so that your regular contact is with a small group of, often middle-ranking, people. Losing your key contacts can leave you vulnerable to change. Moreover, ‘new brooms’ often look to make a mark, even if only to protect their jobs. So they’ll change suppliers – on the pretext of saving money (even if, this proves more costly in ‘value’ terms (see point 2 above)).
Having lots of contacts gives you a better chance to get to know about changes early so there’s time to respond. You must build allies who have good arguments for keeping your organisation, so make sure you spread the good news about the benefits your business is bringing to a wide range of people, particularly people who could turn out to be your greatest allies.
Moreover, as your network of contacts move from job to job, they can recommend your business to their new organisation – so your contacts, and business, can expand. It’s an ill wind… as they say.
4. Develop accounts, don’t just maintain them
Merely trying to protect what you have isn’t the best way to keep business. Actively try to grow the business.
Business today is all about change. So, explore what changes your customers are planning – then see if you can use these changes to become more involved in your client’s business. This could give you a real competitive advantage.
5. Expect price pressure
It’s natural for customers to seek price reductions but you don’t have to give way. Don’t respond to demands in the heat of a meeting. This is when costly concessions are made.
Consider how you’ll respond and check the full cost of any concessions you’re being asked to make.
Check if price is really the issue. For example, consider whether invoices could be phased differently or delayed until a new budget cycle. These things aren’t always possible but it’s important to check.
Ensure customers understand the value of what they are getting. Then, plan how you’ll negotiate if price becomes an issue. Remember, blanket discounts live on to affect all future business and it can take years to get back to previous levels. Look for one-off items on which you can give ground rather than discounting regular on-going business.
If you must give ground on price, try to trade it for other things of value such as better payment terms or more business.
Don’t be fooled by the common tactic of promises of ‘jam tomorrow’ in return for concessions today. Make any concessions conditional on getting that extra business now.
6. Watch your own cost of the sale
Don’t chase every piece of business that comes along. Qualify each prospect to assess your chances of winning. Don’t chase business where your chances of success are low.
Track your call outcomes. If you’re getting calls where the customer makes no commitments to move things forward and all the actions are coming from you, it could be time to re-assess your position.
7. Review your marketing strategy
Now is probably not the best time to cut back on marketing spend, but it may be a good time to review your strategy. Does your marketing spend focus on building your brand image or does it aim to bring in leads now? Building brand is fine but good leads now could be more important.
8. Offer clients low risk solutions
In challenging times, customers are less likely to take big risks. So look for ways of reducing risk in the solutions you put forward.
Plan with clients so they can be confident that your solution will be implemented successfully. Try to offer them small bites rather than facing them with a huge and costly decision.
This article – by Bob Little –first appeared in March, on the Development for Trainers’ website, at http://www.developmentfortrainers.com/keeping-gaining-customers/