Developing and managing customers
There are a few things that are almost always true about a customer – someone we have sold something to at least once:
A relationship, I think, is like a shark, you know? It has to constantly move forward or it dies.
- They have invested in us as a salesperson; they have trusted us enough to buy from us
- They have been sold on the value that we can bring them – at least around the original sale
- They have taken us some time to develop – we have invested our time in them
- In order to have influenced them to buy from us, we probably had to build and demonstrate some level of rapport and credibility with them.
Both you and the customer have invested a lot of time and effort in getting to the point of making a sale. To some extent, there is already a positive relationship in place. But, as with most relationships, if you do not invest a little time in maintaining and developing the link, the quality begins to suffer. When you next want to call on it, maybe the strength of relationship is not sufficient to give you the outcome you want; maybe things have changed while you were busy on other things and other relationships.
It is often five times easier to sell to an existing client than to generate a new client. A well and proactively managed client is more likely to
- Tell other people how pleased they are with your service levels, which may lead to new prospects
- See you as a partner – someone not in it for a quick gain – rather than a salesperson, which builds trust and loyalty, making it easier to identify and secure future sales
- Erect barriers to entry for your competitors because of the strength of relationship that exists between you and them
- Take less time to buy products to in the future because they know you.
Unless you have no real opportunity to sell to a customer again, managing the customer relationship is important. But how do you manage something as individual and subjective as a ‘relationship’?
The Pareto Principle suggests that 80 per cent of your business will come from 20 per cent of your customers, so you need to be clear and objective about which customers represent the real opportunity and ensure you spend adequate time developing those relationships.
What relationship do you want with your customer?
It is an interesting question to consider. We often do not think about defining a relationship in specific terms but, as you are likely to get more of what you focus on, we should consider what we want before we think about how we go about getting it!
- Think what an ‘ideal’ customer relationship would look like from your own perspective. Pick five to ten words that would characterise the relationship.
- Now put yourself in the shoes of the customer. From this perspective, what words would you use to describe the ideal relationship with your supplier?
To what extent do you take steps to create a relationship in line with your answer to the second question? To what extent do you think your own desired ideal relationship matches that of the customer’s view?
If you are to be truly effective at managing customer relationships, you need to bear in mind the following five key points:
- Avoid making assumptions
- Be proactive
- Set relationship goals
- Consider how you move the depth and value of the relationship forward
- Manage difficulties when they occur (see Managing difficulties).
Assumptions are the termites of relationships.
Avoid making assumptions
Salespeople often inflate the quality of the relationship they think they have with their customers. They like to think that their customers are going to be thinking about them whenever they have an opportunity to buy another product and that the relationship that exists will prevent competitors gaining entry to the account.
When you find yourself being a little complacent about the quality, depth or breadth of your customer relationship, challenge yourself to find evidence that your view of the relationship is correct. Typical areas where salespeople make false assumptions that might prove dangerously incorrect include
- How often to contact the customer to update them or just stay in touch
- That the customer knows what else we do and how it could help them
- That the customer will not meet with or consider products from competitors now that we have the relationship
- That we have continuously demonstrated sufficient value add for the customer to keep considering us
- That their situation will stay the same over time.
Consider, for a moment, a successful long-term relationship that you have with someone outside or inside work. Do you occasionally pick up the phone to this person, think of them if you hear about something that might be of interest to them and pass it on, remember birthdays, occasionally just do something because you know they will appreciate it?
Very few long-term relationships have survived without some effort, and that means being proactive. The trouble is that relationship management is an important, but not urgent, task. It is, however, one of those things that will cause your business to fail tomorrow if you do not do it. By the time it becomes urgent, it will be too late.
Examples of being proactive in managing a customer relationship include
- Forwarding useful articles or information that you come across and think might be of value to them
- Making introductions that might be beneficial to your customer
- Checking how things are going with the product/service they bought from you
- Seeking ways to develop additional contacts within the same customer
- Meeting up less formally to find out what is current, what has changed, what the priorities are for your customer.
Selling different products or services – possibly managed by other salespeople within your business – is called ‘cross-selling’ and it represents a real opportunity to extend the relationship with the customer and erect barriers to entry by a competitor by adding value in other areas of their business. Even if you are not responsible for the other product or service that can be sold, you can ask the customer questions to understand their need and make an introduction to the right person. This is likely to be reciprocated, so everyone wins in the long run.
Set relationship goals
No two customer relationships will be identical, because they involve different personalities, cultures and situations. If you are to effectively manage any relationship, you need to first understand where you are now with this individual and then define where you want to be, specifically.
The challenge here is that relationships are subjective things and goals need to be objective. The key to making relationship goals more objective is to look for evidence of success. An important question here is ‘When I have achieved this relationship goal, how will I know?’
Suppose, for example, that you wish to develop more trust, you first need to consider how you would know if the desired level of trust existed. Perhaps your customer would introduce you to his manager, so you can present how you can help the business in another area. In this case, they would give you information that would help position your proposal more effectively and they would act as a telephone reference for one of your prospects. If this is the evidence that you would see, you can then start to create an action plan that would help you achieve the goal.
Goals do not need to be limited to the relationship itself. You might well have tangible revenue goals for future business through this customer.
Moving the depth and value of the relationship forward
It’s important to set specific goals if you are to move the relationship forward, but it helps to have some context for those goals – some sense of the relationship ‘journey’ on which you are hoping to take your client. If you can increase the depth of relationship you have with a customer, you are erecting barriers for competitors and increasing your chances of additional sales going forward.
One widely-used model considers the different levels of relationship that exist. This can help you consider your priorities and the actions you need to take, generically, to help move customer relationships forward. Often, specific definitions depend on your company, context and customers, but the following provides an illustration of how this approach can work.
The start point is objectivity. You need to define the different relationship ‘levels’ that could exist and what, specifically, characterises them. You may have the following definitions:
|Prospect||Someone who has not yet bought from us but is a qualified potential customer|
|Customer||Someone who has bought from us once and may or may not have any loyalty to us|
|Client||Someone who has bought from us more than once and has demonstrated that they see the value we offer|
|Supporter||Someone who acts as a reference for us – we have relationships with all of the key decision makers and 70 per cent+ of the influencers|
|Advocate||We have a close relationship at senior management and middle management levels. We know all of the decision makers and influencers. We share strategic plans and the customer inputs ideas and suggestions into our product development|
As you move from prospect to advocate, you are increasing the depth and quality of the relationship that exists. This makes it much more difficult for competitors to get in the door.
Consider what levels of relationship would be appropriate and desirable in your context.
How would you define them?
Now classify your existing customers into these levels – be objective!
Defining relationship levels enables you to then ask such questions as ‘What do I need to do to transform a client into a supporter?’ This will give rise to some specific actions that you can take.
A customer is the most important visitor on our premises; he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.
Using the customer as a resource
A customer is a valuable resource and not just because they have paid for a product or service. You can utilise their decision to purchase in a number of ways to help you increase your business. As part of your management of the customer, you need to consider how you can maximise the benefit of them becoming a customer of yours.
A customer can
- Be the subject of a case study – you can use case studies as marketing and sales collateral and to help other prospects in a similar situation understand the real benefits of working with your product/service and with your company
- Give referrals to other potential customers – your customer probably knows other people who could benefit from your product or service and can give you their names
- Act as a reference, either with a written testimonial or when on the telephone with prospects.
Interestingly, asking customers to act as a reference or give you referrals actually increases their sense of loyalty towards you as a supplier. By agreeing to do either of these things, the customer is putting their name to your product and company. This makes them more likely to tell others about it and to speak positively about you (as long as you give a good service and your product does what it says).
Add value to the customer – constantly
By adding value whenever you can, you build trust. Here are examples of ways in which you can add value:
- Send them information that allows them to be better educated about their market – press cuttings, latest research, the competition to their company
- Demonstrate how they can make more money in a new way
- Demonstrate how they can save money
- Send something for free which may have a high perceived value
- Think about educating them in every face-to-face meeting
- Offer training to the staff
- Invite them to a networking event.
And if you want to know what you can do that would really add value to the customer, you could just ask: ‘What could I do that would add most value going forward?’
Customer knowledge and understanding
Part of your ongoing management of your customers has to be to get as clear a picture as possible of their organisation as it relates to your product or service offering.
- Understand the challenges and priorities they face in their market.
- Broaden your contact base within the customer – identify decision makers and influencers; get introductions to them.
- Understand the culture and how decisions are made.
- Understand the personal wins and motivations for your key contacts.
- Find out what is happening in the business that might represent more opportunity for your company.
- Research them, using tools such as the internet, so that you are aware of changes that could help or hinder you and gauge how you can add value through your business-focused conversations with them.
One of the easiest and most effective ways of increasing customer knowledge and understanding is by spending time with them. Look for opportunities – formally and socially, if appropriate – to meet and ask questions.
See the topic on Client Account Management