Top performing companies know that they don’t have to compete on price because they have a secret weapon that their competitors don’t have. They have adopted a company-wide approach to creating and sustaining mutually productive relationships, which serves the needs of both parties. Their value and the reason they can charge more is that they gain a deeper understanding of both the buyer's long-term goals and the overall business climate.
Have you ever had a customer “break up with you” because you charge too much? Or worse, have you ever had a customer “break up with you” and go to a competitor who charges more than you? In both cases, value and the customer’s ability to feel a part of the decision process were the determining factors of who would win the business.
Client retention is not just the work of the customer service department. It is the responsibility of the entire organization.
Customer focus is the foundation of retention.
Customer service is when you fix a customer’s problem or give-in to a customer’s request. Customer retention is when your organization understands your customer's point of view, agenda, buying cycle and best interests. Customer focus is what sets top performers apart and is how they are able to charge premium prices for their products or services.
Customer Focused Sales Professionals Dig Deeper
Jonathan Farrington, Director of Research, Sandler Research Center, notes that the very best salespeople gain a deeper understanding of both the buyer's long-term goals and the overall business climate.
They understand that:
- At the heart of customer focus is the art of listening constructively. The best salespeople are masters at capturing information.
- Customer focus means taking the customer seriously. Today, the salesperson who clings to the product orientation of a decade ago is losing ground.
- As client companies branch into new markets and unfamiliar territories, they are demanding unique, flexible solutions from their vendors that are customized to support specific goals.
- Another myth that can be exploded is that, while customers value flexibility, being too flexible can undermine the sales relationship. On the whole, salespeople imagine that customers value a vendor's responsiveness above all. However, recent research shows that their primary concern is reliability.
Customer focused means developing a partnership that extends beyond a selling relationship. And the motivation should be strong to do so as it costs five times as much to attract and sell to a new customer as it does to an existing one!
In a recent survey conducted by the Sandler Research Center (SRC), participants responded to 3 questions about their client retention:
- How committed is your organization’s approach to the retention of existing client accounts?
- What percentage of your sales team’s time is dedicated to client retention vs. pursuing new business?
- Do you conduct regular reviews with your client accounts, focused on their specific definitions of success?
There are two observations regarding retention from the SRC survey, The Essential Components For Sustaining Overachieving Sales Results:
- 70% of the respondents say their companies are committed to retention but 38% spend less than 40% of their time dedicated to retention.
- 35% of respondents reported losing business over price concerns.
The right to do business and to charge more than your competition
The life of a business relationship is very similar to a personal relationship.
In marriage and dating if the relationship is taken for granted, it can get stale, stagnant and even die. The same is true for business relationships. If the thought of a break-up makes you uncomfortable, you will want to make sure your entire organization is trained to continue “courting” your customers or clients even after you have “put a ring on it.”
KEY TAKEAWAY: Account retention is not a noun, it’s a verb. It's not what you get, it's what you do.
(It’s also a hashtag. Go here to follow #accountretentionisaverb for more resources on retaining customers and clients)
Between 68% and 80% of your orders will come from existing customers this year – unless, of course, you are selling commodities. If you fail to look after them, nurture them, respect them and constantly work to earn the right to their business, they will respond accordingly.