Businesses that do not focus on customer retention and manage customer relationships are always fighting the churn. In a hyper-competitive marketplace, the first priority really should be to retain customers – it costs several times more to acquire a new one.
Corporate leaderships should undertake four activities to ensure the best return on both customer- and shareholder equity.
First, make sure that you understand the business climate’s effect on customers. Then, use this knowledge to set a strategic direction that focuses on customer retention, and create value-added offerings to help the customers meet their needs.
Next, arm the salesforce with up-to-date info about customer needs to make sure that mutually beneficial solutions are presented to them. Finally, leaders must ensure the analyst community recognises the company’s strategies and results so that these translate into increased shareholder equity.
Maintaining stability in business relationships is one of the most important goals for companies. Many organisations have spent millions on the CRM promise, capturing information about customers and their buying habits and needs to customise their marketing and sales approach.
Get customers talking – to you
Yet, more than 75 per cent of enterprises are incapable of combining a comprehensive view of the customer with inter-actionable, personalised advice to customers or sales/service agents.
Customer strategies, revenue and profit goals need to be based on explicit customer-driven criteria that feed into the unique strategy for each major account. Today, that perspective must be forward-thinking since historical realities may or may not prevail.
Suppliers who are successful in understanding their customers’ current needs and supporting their goals will retain more of them and reap the benefit of increased sales. To achieve this, management needs to establish an in-depth dialogue with customers.
Undertaking interviews produces the information one needs to set the business direction, and project revenue/profit targets. You also will have the information the salesforce needs to capitalise on the profit potential of major accounts, which includes qualitative details on each account, metrics that influence buying decisions, and specific account plans.
If the company develops a solid picture of the quality of its customer relationships, they are positioned to support the emerging needs of their existing accounts. The management’s role is to create the focus and provide the tools and products for success.
Once marketers have focused on aligning strategy to customer retention, they expect to meet the revenue and profit projections. They also have worked to develop an image that would attract new business through referrals and contain customer acquisition costs.
A new mission statement
Picture making this statement to stock market analysts: “In light of current conditions, we have performed an independent audit of our best customers to determine their needs, their general propensity to buy and propensity to buy from us.
“We have also identified necessary changes to our strategies and value propositions – changes that are being deployed. We are confident that we understand customer needs and what’s required from us to fulfill those needs to hit our forecasts. And we’re building a feedback mechanism to ensure that we stay on top of these crucial criteria.”
For shareholders to profit from a customer-focused strategy, companies need to make sure financial analysts recognise the results and reflect them in their view of the company’s performance.
Although your company may be out in the marketplace talking to customers on a regular basis, marketers still benefit from having pulse-checks administered by an unbiased third-party. Many companies think they can eliminate this activity once the business climate improves – or worse, as a cost-saving initiative.
Ongoing checks act as an early-warning system, identifying emerging trends and customers at risk of attrition.