A lot of people focus on sales and selling but only in terms of outreach to new customers. New customers tend to be the holy grail for many companies seeing them as the pathway to growth and profitability. I see this little bit differently. There are essentially four key sales strategies that we need to pursue in order to maximise our sales potential.
They are keep, attain, recapture and expand.
Keeping customers is frequently the most overlooked route to business growth and increasing profitability. A study by Invesp Consulting suggests that only 18% of businesses have a customer retention strategy as their focus.
FUN FACT: it costs five times more to attract and convert a new customer than it does to sell to an existing one and when budgets are tight this is a huge difference in terms of potential profitability.
According to Amy Gallo (Harvard Business Review) retaining just 5% more of your customers can increase profitability (that’s profitability not revenue) by between 25 and 95%. That’s an amazing difference in your company’s bottom line.
In order to keep customers, you need to be in contact with them and you need to evaluate the relative strengths and weaknesses of our current position in regard to their wants, needs and desires. At Sandler we use a tool called RECON as a framework to structure regular communication with our existing customer base.
You need to help focus the mind of your customer:
• Why did they choose to buy from you in the first place?
• What challenges were they facing with an incumbent?
Help them to remember whatever it was that was the key decision-making factor in getting them to work with you in the first place.
Have a frank conversation about your current performance and your customer’s expectations:
• Have you delivered on the promises you made?
• Are you meeting the service level expectations of your customer?
• Have you fallen short in any way?
You need to understand what you are doing right and where, if any where, you can improve. Customer satisfaction is key to customer retention - the things you do that the customer perceives as “above and beyond” are the things that will make a difference to the next prospect that is sitting in the same boat – tangible examples and experience you can put on the table that you know they will really value.
I’ve heard it said that all businesses encounter some major change in operating circumstances every 90 days. With that in mind the landscape of business challenges facing your customers is likely to be different every time you have a conversation:
• Understand what is happening in their ‘world’
• What changes have happened?
• What new challenges do they face?
Understanding your customers allows you to position yourself to offer new solutions.
In many circumstances the challenges your customers face are opportunities for you to help them even more.
• Understand their challenges
• Table things you can do
• Demonstrate how you can support them
It really is a WIN WIN.
The customer gets to solve their problems with an existing provider whose capability has been proven. In turn you get to extend your product footprint and develop your relationship to one which is much more deeply embedded in their business.
This is the key to long-term partnership and trusted adviser status.
Once you’ve uncovered challenges and proposed solutions to deal with them, you need to question the customer on the next steps to make implementation of these solutions a reality. This might involve:
• Talking to new people within the business,
• Budget discussion
• Deadlines for implementation
So you need to leave our RECON communication with a clear sense of what happens next to solve these challenges.
Depending on what you do, a regular RECON discussion can revolutionise your relationships with your customers. It can strengthen your existing position, protecting you from predatory competition. It can enhance how the customer sees you in terms of your ability to work with them to solve challenges and it can help you gain a clear understanding of your organisation strengths and weaknesses when dealing with customers.
In a competitive environment all of these dimensions are rocket fuel for your business.