Customer Retention and New Business Strategy Clues From Your Customers
Learning from your customers can lead to better account retention and new business opportunities. The first thing to learn from your customers is why they selected you in the first place. They had many choices, including the option to stay with the incumbent supplier. The second important area to learn is why they stay on as a customer. These could be completely different reasons, and it’s important to know the difference between the two.
Why Did They Pick You
Other than superior salesmanship, what other reasons did they first start working with your business? It could’ve been a compelling value proposition, being in the right place at the right time, or luck. It could also have been a triggering event that had taken place within the customer's business. That triggering event could have been a new product launch, a supplier that failed them, or new staff members.
The key lesson here is that it doesn’t matter what you think. It really matters what your customer thinks. So, ask them. Ask them why they chose you as a supplier. The more you know about how and why they made those decisions, the easier it will be to find more like them. Ask your last 10 new customers why they selected you as a new supplier. Doing this will arm you with some great talking points for your new business development efforts.
Don’t Take Customer Retention For Granted
We’ve seen it time and time again. During that new business development phase, you’re doing cartwheels to try to attract new customers. Once they are in place though, it’s easy to take them for granted and think that they will stay forever.
Take a similar approach, and ask your existing customers why they stay, why they keep coming back. Learn what you do that makes it easier for them to do business, and makes their lives easier. You may also learn about some things that you do that annoy them — that’s a good thing. This will give you an opportunity to take corrective action.
Profile Your Best Customers
It’s worth repeating, the more you know about your best customers the better off you’ll be. Another good exercise is to profile your top clients. Try to categorize them by their demographics, geographics, and psychographics. Knowing what kind of business they are in, and the roles of the individuals that you work with will help round out their demographic profiles. Their geographics — where they are located, can be particularly important if you’re part of their supply chain or you have a logistics competitive advantage.
Understanding the psychographics of your best customers is another key ingredient to a successful business. There has been a lot of research done on why people do what they do. Studies that discuss how the innovators and early adopters behave and knowing the difference between the early and late majority groups can prove extremely helpful. Identifying the traits of your best customers and how they may fit within these categories allows you to segment your customers to better meet their expectations. You may also find you’ll need a different message, or value proposition, to move beyond the innovators and early adapters in your marketplace.
Finding, and keeping good customers is hard work. It’s even harder if you don’t really have a plan. Knowing why your customers selected you to begin with, and why they stay, are two critical components for any business. Adding your customer profiles as the third dimension to the mix, can form the foundation for an outstanding business development and customer retention strategy.
If you’ve done something like this in your business, or if you’ve participated in such an exercise, I’d appreciate your comments as to how it worked for you. What did you like about it, and what you would do different in the future?
Mike Philie can help validate what’s working and what may need to change in your business. Changing the trajectory of a business is difficult to do while simultaneously operating the core competencies. Mike provides strategy and insight to owners and CEOs in the Graphic Communications Industry by providing direct and realistic advice, not being afraid to voice the unpopular opinion and helping leaders navigate change through a common sense and practical approach. Learn more at www.philiegroup.com, LinkedIn or email at email@example.com.
Mike Philie leverages his 28 years of direct industry experience in sales, sales management and executive leadership to share what’s working for companies today and how to safely transform your business. Since 2007, he has been providing consulting services to privately held printing and mailing companies across North America.
Mike provides strategy and insight to owners and CEOs in the graphic communications industry by providing direct and realistic assessments, not being afraid to voice the unpopular opinion, and helping leaders navigate change through a common sense and practical approach.