Archive for April 14th, 2008

Customers for Life.

Customers for Life.You will never know the wrong turns

It is likely that you sell many more different products than customers buy individually from you. You may have been happy to just get the annual service/upgrade revenue from them. Knowing that getting new customers is harder and costlier each quarter, it makes sense to me that getting more sales from present clients is a great investment regardless of the economy. We had a client who received 75% of his annual target income every year,  one week into the first quarter from upgrades, new product buys and service contracts. And that amount grew 10% every year regardless. Now he was an good businessman. Oh, if you are just a one trick (one product) company,  shame on you, what are you thinking?

Present customers are more than a nice to have. They are your well run gold mine to develop. All it requires is a structured process and hard work. As much work as you put into getting new customers and replacement ones for those you lost should be the least you put into present customers. The client above also had a 95% client retention rate. But I digress.

A clients for life attitude starts by knowing when you look at the account, that the dollar figure that should come to you is not the first sale amount or the annual fee, but the total dollars possible from this client for the next 10 to 15 years. If you do not have this number or know how to come up with it, its time to do some serious market research on your customers and what else they are buying.

This research is more than the annual client customer survey of additional product features you need to add to the same product to keep the customer. (You do not do that? Obviously you are in a lifestyle business, not a real business – so how is that working for you? )

Real example Zappos: 3/4 of purchases are from repeat customers. Loyalty is a huge competitive advantage. Let’s say the average cost of customer acquisition in their field is $50. They are always $37.50 ahead of the competition. How can you beat that? (a – Tony Hsieh, CEO, Zappos)

Then its a matter of creating a systematic process of educating the client about all the other things you can do to make their life easier and less painful. Wait for it , what am I talking about? It sounds like ——it is, a nurturing campaign, run by marketing to educate your clients over the year about new value you could bring to them. You have to do the research, identify the pains , identify the numerous audiences in the target and the appropriate messages for them and launch a program, just as if they were a new client. Wouldn’t your clients like you to pay attention to them after the sale like you did before?

Here is where your customer support group really can shine. They are often more in contact with the client than the sales folks after the sale. They too need material and help in extracting where else you could be helping the client, what issues are arising. That’s why I love to bonus Customer Service for new business. I once had a Service Rep who ran our repair counter. He consistently sold the same hard drives at a 40% higher margin than they were displayed on the store floor. He sold lots of other add ons as well. Customers left the choice up to him because he was not a salesman – but his sales commissions were often higher than most floor sales guys. I just loved that guy. What are you doing to help your Customer Service guys increase their salaries and become a real company hero? Word to the wise, you are not turning these CS folks into salesmen (they did not choose that path), you are helping them help each customer more.

I surprises me so much that we meet companies who know so little about their own customers that they have made only one sale to one department in a gazillion dollar client. Or to one location to a multi location company. That would keep me awake at night, scheming how to do better. How do you grow without spending your brains out if every sale is to a new client? Wrong, wrong, wrong. Talk about drive-by selling. Or sell and forget. You let the customer forget about you. And all it takes is some concentrated research effort and work to make just so much recurring money

And that’s 30.success 2

The Kite Runner. Khaled Hosseini

The Kite Runner. Khaled Hosseini. 2003. ISBN 0385660073. What can I say, its been around for quite some time, but I finally got around to read this good one yesterday, fiction being one of the last things I reach for. If you seek insight into the Afghan soul and life, read this book. It is well written, with no respite for those who want an”easy way out”. I can see why it would make a gripping/intense movie. Too real at times, the author has a talent for capturing the reader. It brings home that in every country in every time, ordinary people get involved, and there is always hope.