A rolling snowball gathers more snow
Image courtesy of LinkedIn; Customer Lifetime Value

Use it or lose it

Use it or lose it can apply to many things and is commonly used in reference to such as brain function or muscle tone but what I want to address here is the relationships you have with your customers and the risk you run of missing out on their potential lifetime value.

A common belief is that it takes 10 times as much effort to gain business from a new customer as it does to gain additional business from an existing one. If this is the case then the effort that you put in to nurturing and developing established customers should be proportionate to the gains that can be made. But all too often, relationships with customers are considered to be ’done & dusted’ – you have put in the effort, you won the first piece of business and now you have a customer for life? But that first piece of business is not the end, it is only the beginning of what will be a lifetime’s work for you.

Customer relationships are living breathing things that will change, evolve, move forward and retreat over time. Neither the customer’s organisation nor your own is static and the relationship needs to be updated and refreshed in line with each significant change or better still as an ongoing evolutionary process.Image courtesy of LinkedIn; Customer Lifetime Value

I have many examples, from my working life, of the value that can be gained from well managed customer relationships; the most significant being the relationship I created with a customer commencing in 1978 which lasted through to 2002. This required considerable effort and commitment from me and my company but it was measurably beneficial for all concerned and the key lessons that I learnt from this and other experiences are:

  • Don’t take them for granted
    • Don’t assume they will come to you – if you’re out of sight you’re out of mind.
    • Don’t assume they are not being bombarded by your competitors – be alert to where temptation may strike.
    • Don’t assume they are the same as the last time you saw them – be sensitive to changes in market conditions and personnel.
    • Don’t assume each person you meet from the customer has the same needs or that they will think the same way about you and your company – you must work to gain the respect of each individual contact.
    • Don’t put a price on everything you do for them – relationships go beyond the revenue you can bill.
  • Be proactive
    • Stay in contact even when there is no revenue earning work to do.
    • You are an expert in what your company does and you deal with many customers so your knowledge, within the context of your proposition, is greater than that of any of your individual customers. Take your knowledge to them and share freely.
    • By demonstrably adding value they are more likely to feel the benefit of the relationship beyond the value of using your products and services and are more likely to want to stay loyal.
  • What else can you do?
    • Sell them everything you do. Most new relationships start with just part of the supplier’s range and it is your job to ensure your customers know everything you can do.
    • Cross-sell – if you are in one division or subsidiary ask your contacts to help you into others.
    • Up-sell – you may have started the relationship with quite a small deal but don’t let that pigeon hole you – move up! They can now see how good you are so are more likely to be confident enough to trust you with bigger opportunities.
    • Take them new things; don’t assume they will find out for themselves about your future products or services.
    • Watch their evolving needs and requirements and consider how you can change what you do to keep yourself relevant to them.
    • Watch their market environment and become a trusted advisor on how to prepare for and deal with external impositions and opportunities.
    • Don’t just call them when you want something – be a giver as well. Consider what you can do for them that may be small for you to give but important for them to receive.

Final thought; while using a CRM is a very useful way to keep track of the activity between your company and each customer, don’t fall into the trap of assuming the CRM is the whole solution. Relationships are about human communication so you must invest to have the right people with the right skills if you want to gain the full lifetime value from every one of your customers.

This article was first published by Phil Shipperlee on LinkedIn Pulse