Customer retention, customer loyalty
By Michael Stops
Nearly all of us are facing several methods aiming at customer retention daily. May it be general bonus points on your just done purchased offered for your next one, a folder for collecting bonus points combined with special nice products at a reduced price, credits for a purchase at Amazon etc.. There are so many different systems which all are targeting at you doing your next purchase in the same shop again. These examples are from regular consumer business.
Of course customer retention is also an important issue for B2B business. Imagine how much money and efforts you spent to get your first order from a new customer. How to have him back for the next project, how to have him as a regular constantly buying customer?
Sometimes the big market players give a clear indication for that from their side: They request a bonus from you, for example to lower your prices on running business by a certain percentage – most popular are figures between 3 and 5 % as an entrance card just for being in the race for the next project. Not very fair! And it cannot be your target as a salesman to pay such prices; don’t forget: We are talking about sales not about donations. So, let us point out some recipes how to create customer retention without giving away all your margins. The general recipe is quite simple: Honest, competent and continuous project work
In the past it was considered very important for a salesman to have close personal relations to his purchaser which was to become manifest in nice dinners, expensive gifts, sometimes even common holidays. In that past time agreements were made and orders were given in the evenings in a ice wellness atmosphere during dinner. This time is absolutely and irretrievable over!!
Nowadays business is done in the offices during regular working time, based on facts and arguments. All purchasers will have to explain and to account for their decisions to a higher lever board in their home organisations. In many cases the whole purchasing process is done in a team.
So what does it mean, honest, competent and continuous project work?
It simply means added value offered by the salesman resp. the sales organisation to their customers. Some examples for that added value:
In an early phase of the project: Assistance for the assigning the specification sheet by offering the special know how of the supplier in his own portfolio. That means to take influence in the product definition. Your customer will allow you that only after you are proven as a reliable supplier and more after the acting people are considered reliable and trustworthy.
Communication within the customer organisation: The giving of some detailed explanations in a way which also non-specialists will be able to understand.
The bigger a customer organisation is the stronger the division of work will be. And real live shows that the communication between several specialist departments of a company is not working as it should. And sometimes it is just easier to ask questions to a reliable person who is not part of the own shark basin style organisation. It is one of the elementary tasks of a salesman to act as a communicator. If he takes up this role in an open and honest way he will find many friendly people around him. Being considered reliable many doors will be open for him.
But again this is a continuous job which causes a lot of time and efforts normally without any feedback from customer side and without measurable effects on the gaining of new orders. Nevertheless this role of a communicator is to be highly and valuably rated.
Serious reaction on complaints: No, it does not mean to take over all requested claims and warranty cost disregarding the real responsibilities. Although In many cases a complaint starts with the customer request to take over whatever cost. The right reaction is to take over the issue as your own task which has to be solved even if it might be obvious that the complaint is not rectified. In abstract: A complaint means that there is a problem with or close to your product which causes headache to some people. The real task is to find the root cause for the problem with the chance to optimize the whole system. If that is successfully done the final discussion about the participation in cost be much easier and will take place in a friendly and cooperative way.
Again such a job will finally lead to mutual trust and reliance. Especially the working on complaints will have great effect on customer retention. Unfortunately, but again the effects on winning of new orders will not be measurable.
Offering of know how: Several people from several disciplines of a customer organization will be involved in a project. They all are specialists in their fields. They all will influence the final decision. And they all will have to justify their preferences and decisions. But still the specific know how on the product is – or at least should be – in hands of the selling organisation. They should have an advantage in their knowledge about their product. This know how has to be offered and will be accomplished by the customer’s specialist know how in the surroundings.
So it is one of the beating tasks of sales to have this know how available in persona of the suppliers specialists at the right time at the right table. That is the so often mentioned function of sales as a connector link between customer and supplier.
The ideas described above are only meant as some first incentives to encourage you to be creative yourselves in finding out what your customer – and in this respect your customer is not company XYZ, but it is the individual Mr./Mrs. XYZ – really needs to feel comfortable and successful in his job and in his organisation.
Never forget, in any project the quasi objective task is always and ever influenced, maybe even ruled, by the subjective and deep-rooted situation of the individuals involved. It would be an erroneous belief that two at first sight identical technical of commercial projects would really be the same. The popular phrase “I know how it goes, I had the same thing 3 weeks ago” is a very dangerous one likely to leading you into the offside.
You may think that all that is nothing new. And you are right. It is or at least should be common knowledge. Maybe the term of “Key Account Management” came up to your mind several times when reading this article. But if you look around, it seems to be forgotten in every days life – It is worth to be reminded. And as is so many things it is easy to explain what is to be done. But it turns out to be much more difficult to create ideas how to do it – successfully.
When following the described aspects open minded and seriously you will earn what you desire: Customer retention or even better as the crown for salesmen: Customer Loyalty.
Michael Stops is with MST-Vertriebsconsulting, which offers its customers consulting and support based on a long-term and multi-faceted experience gained both in large as well as small organizations and companies.