“If your business leader does not love customers and is not committed to delivering value to them, your venture will fail.”
~Ken Morse, serial entrepreneur & co-founder of 3Com Corporation
Does your company love your customers? The harsh truth is that most companies don’t love their CURRENT customers. Instead, they love acquiring NEW customers. New customers are sexy and exciting, so that’s where they spend their money and efforts; that’s where star salespeople earn their stripes. After the deal is signed, those formerly exciting new customers become “current customers” and are handed off to less experienced account managers for servicing.
Yet your current customers are the most important customers you have. Instead of losing touch or relegating them to second-class status, you need to deepen these relationships. You need to understand their problems, partner with them to find new solutions, and turn them into evangelists for your company.
Further, if you’re focused on acquiring new customers to replace revenue from current customers who have stopped buying from you, you’re investing precious resources in the wrong place.
I experienced this issue a few years ago when a $10M operation became part of my division. As a way to re-charge growth, I began working with the General Manager and the team to re-establish the importance of the customer and customer service. I asked the General Manager to go out and start talking to customers (both current and former).
A few weeks later, the General Manager called to tell me about a meeting that he had just had with the President of one of their former customers. This company, one of the largest potential customers in the market, had done business exclusively with our operation until about five years earlier.
In precise detail, the President told the General Manager the story of why they stopped buying from us. Our company had let the customer down on a critical and time-sensitive job. Our product was late; we then lied directly to the President about the shipping status of the product costing the customer more money and delays; we never followed up; and we certainly did not apologize for our mistake. It was no surprise that the customer never placed another order with us.
In our discussion, my General Manager and I determined that this atrocious customer service and lack of follow-up had cost this $10M operation about $7.5M in revenue over the previous five years. Combining together the lost margin and the additional sales and marketing costs to acquire new customers, that one job cost this business $3.0M!
In short, loving your current customers and treating them well matters!
TIPS FOR CREATING A CUSTOMER-LOVING COMPANY
- Know your customers. Top management needs to get out in the field and meet with your current customers. In this way, they can ask about other needs and requirements that can lead to additional sales, new product or market ideas, or even a partnership that binds your organizations more closely. Your salespeople may not be able to get to this depth, but a senior executive often can.
- Listen to your customers. A survey by Harvard Business Review reported that what customers most wanted was salespeople that 1) understood the customer’s problems and 2) understood how the salesperson’s product and services could help the customer resolve these problems. Understanding a customer’s problems means that the salesperson has to ask the right questions and listen closely to the answers, always remembering that the customer is tuned to radio station WII-FM – What’s In It For Me!!
- Measure customer satisfaction and act on it. What has your customer churn rate looked like over the last few years? How many customers have you lost? How many customers are buying less? In reviewing this data, don’t blame the economy or excuse a customer whose business is suffering. Instead, follow up with these customers and ask why they stopped buying or are buying less. In addition, if you survey your customers, follow up on the results of the survey so that the customers know that they were heard.
- Perform: Performance is very simple: do what you say you’re going to do. Be especially careful to deliver on a customer’s hot buttons by ensuring that your expectations match and that your solution solves the customer’s problem. Performing also means always treating your customers well. Return their phone calls and respond to their emails; even if you don’t have an immediate answer to a question or problem, reply that you’ll get back to them by a specific date. Always be upfront and honest with your customers, especially when there are problems.
- Align the organization to love the customer. This starts with the leaders — they need to get actively involved in customer problems to understand and resolve these issues. In his effort to transform IBM into an integrated, customer-friendly organization, Lou Gerstner required his top 200 executives to make face-to-face problem-solving visits to at least five customers each, and then get personally involved in every visit report. By constantly teaching and preaching customer service, autopsying customer service failures, and sharing and praising customer satisfaction success stories, leaders will go a long way to creating a customer service culture where each employee has the right attitude and right focus on serving the customer and being easy to do business with.
SUMMARY
Think about it. Your current customers are already in the habit of giving you money. If you continue to earn and retain their trust and love by delivering on your promises day in and day out, they will remain loyal. With loyal current customers, all the work to win new customers and penetrate new markets will be an add-on to your current revenue stream, allowing you to re-charge growth.
What do you think?
Please share your thoughts and experiences with us here!
https://www.therevenuegame.com/ceochallenge/08/love-current-customers/
ABOUT THE AUTHOR
David Shedd is the President-CEO-COO and Principal at Winning B2B Leadership. His book, “Build a Better B2B Business,” is available on Amazon.
Winning B2B Leadership / davidshedd@cox.net 480-734-0569 / LinkedIn / Twitter