How much time do you spend trying to entice new customers to your business? Did you realise that it is actually much cheaper to retain an existing customer than to attract a new one, and trying to regain a lost customer is even more expensive. Simply, the best process is once you have a customer, initiate customer management systems to keep them for life.
The marketplace today is crowded and changing rapidly with new technologies emerging, new competitors and customers are even more demanding. It is important to be able to stand out from the crowd and create a lasting and genuine differentiation between you and your competitors. Today customer focus is high on most business owners agendas supported by ample evidence that customer satisfaction equals high profits. If customer satisfaction equals high profits, should all customers be treated the same?
This is where most business owners fall off the rails. A little customer differentiation at this point makes all the difference in building business profits. If you focus your resources on your high value, high potential customers you will reap the greatest rewards. This does not mean that you ignore your lower value customers, rather treat them in a manner, which is appropriate for the level of support they give you in your business. If you follow the Pareto Principle you will find that roughly 20% of your customers provide 80% of your business. The key is to focus in on this 20%.
Once you have identified your “A” List customers ensure that you delight them throughout the service experience to ensure a firm relationship. Key elements to do this include:
1. Encouraging and rewarding customer loyalty
Chase the ongoing loyalty of targeted customers, aim to have these customers repurchase, encourage bigger and better purchases and recognise these people by providing added value. This might be a formal loyalty scheme.
My local coffee shop has a frequent buyer program. They reward my frequent purchases with a free coffee after ten purchases.
2. Build and manage special customer relationships
Make sure the commitment is a two-way thing. There has to be something in it for both of you. You will cement the relationship by learning more about the customer and creating a value exchange. This could take the form of “key account management”.
A client of mine owns and runs a stationery supply business. They have fostered relationships with schools and now handle the ordering, packaging and delivery of back to school supplies for the students. This service saves heartache for the school and has created a lucrative business opportunity for the business owner.
3. Business wide focus on relationship development
Moving from a sales focus to a long-term relationship focus has exciting implications for you and your whole business. It’s important though that everyone involved in your business understands and embraces the relationship development strategy. The development of long-term relationships must be put ahead of short-term revenue or profits.
A small consulting firm I support set out to build a long-term relationship with a large Government Sector Agency. Their approach was to target the Agency with a tailored product at a very competitive price in return for a long-term contract to implement their product. Previous players in their market had gone in to the same agency with high priced short-term plans. Their strategy to build a relationship paid off in terms of consistent demand and cash flow
Most business owners already acknowledge the importance of their customers, through investments in marketing, customer service and loyalty programs. Their pace of change in implementing these programs though is sometimes too slow or their knowledge of their customers is not deep enough. The key elements to customer understanding are:
1. Understand the priorities and preferences of customers
Identify your customers preferred service level for current and potential future experiences. Be clear about what is most important and what is least important to the customer.
2. Compare customer’s perceptions to reality
Understand why customer perceptions may fall short and others go beyond actual performance. Identify your businesses perceived and actual performance, especially in priority areas for your customer.
3. Compare perceptions of you and your competitors
Undertake a “gap analysis” to understand your weaknesses and your advantage and get clear on what action you will have to take to gain the advantage.
Customer focused business owners know that the loyalty of their best customers is only achieved by delivering outstanding value to them and by delighting them at every interaction. Creating loyal and profitable customers is the foundation for value creation within the business. This simple formula can provide you with a strong and sustainable opportunity to increase the profits in your business.
Article Contributed by Lindsay Adams, International Speaker with Training Edge International and President of Global Speakers Federation
Website : www.trainingedgeasia.com
Email : Lindsay.adams@trainingedgeasia.com
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