Today’s guest blogger is Dave Cooke–more about Dave at the end of the post. Thanks, Dave, for sharing your words of wisdom with The Whale Hunters readers today.
As businesses continue to drive their sales teams to bring new customers into the organization, they need to be mindful that revenue growth also involves the effective maintaining of their existing customer relationships. After all, if all the business is doing is replacing lost customers with new ones, net growth is at best, flat. Net revenue growth requires stability in the existing customer base while these new customers are being added. To extend this point even further, an even more economical and productive form of revenue growth is systematically finding new opportunities to increase sales with those existing customers.
I refer to this revenue model as The ACRE Principle. The ACRE Principle is based on the notion that sustainable revenue improvements are accomplished through the four stages of growth activities: attraction, conversion, retention, expansion. While many businesses are quite active in leveraging their sales, marketing, and social media activities to attract and convert new customers into the organization, few are as effective in taking advantage of the many profitable opportunities associated with retaining and expanding relationships with existing customers. Statistically, it is anywhere from 2-5 times more expensive to replace a customer; yet, more time, money and resources are allocated to acquiring new than retaining existing customers. Effective and profitable increases in revenue are directly attributable to an organization’s ability to keep and develop the customers they have.
For those organizations who desire to have a more effective retention rate with their existing customers, here are a few proven techniques:
- Be consistent: Promotions, specials, and deals made available only to new customers are a slap in the face to your loyal customers. If there are opportunities for rewards for entering into a business relationship with your company, there needs to be a program that honors and gratifies those customers that have already joined the club. Otherwise, these customers will be looking for reward opportunities with other suppliers.
- Make your existing customers feel like they are the most important customer: How you communicate with your customers sends a message as to how much you value them. Every customer knows you have other customers; they simply don’t need to know that you are so busy handling a customer issue that you do not have time to deal with theirs right now. When a customer calls asking for your time and attention, focus on the conversation you are having with them, be present to their issues, and discover a way to manage their issue in a responsive timeframe without sharing that you are in the middle of something else.
- Let them know you are thinking of them: With all the information available on the Internet, creating Google Alerts regarding customers is an important way to catch-up on news and noise about your customers. When a piece of interesting information flashes across the screen, send them an email with the link and a nice comment about the article. Nothing says more about the importance of your relationship with them than a thoughtful “hello.”
- Thank them for their business: When was the last time you sent your customer brownies, a card, a thank you note, or stopped by with doughnuts for a team meeting? Simply demonstrating your appreciation for their business is a wonderful way of saying “thank you.”
- Get involved in their business: Every one of your customers is working on something important to their business. It may or may not be something that will be of interest to you or your company; but, that is not the point. Discovering what their key projects and programs are and offering ways to be a resource for them as they work through it demonstrates a commitment to your customer beyond the supplier-customer relationship.
Great business relationships are strengthened and expanded through a commitment to the relationship. Organizations focusing solely on growth through acquisition struggle to sustainably and profitably grow. Organizations that value the relationship and emphasize their commitment and interest in maintaining and expanding the relationship have a much steadier and stable growth curve. All that is required for a steady growth program is a little time, attention, and sincere interest in the relationship.
Dave Cooke is CEO of Strategic Resource Group, llc. Dave leverages over 25 years sales and marketing experience to provide businesses with educational programs and consulting services focused around sustainable growth strategies and effective relationship building behaviors. Dave has developed the Sustainable Revenue Formula (SuRF) which provides an organizational program for increasing and stabilizing revenues. His commitment and his passion are founded in the belief that businesses will grow only as effectively as the team is organized and committed to growing it.