Priority One – Retain Your Customers
During a recession retaining your core customer base is priority #1.
This past week Colleen Edwards who is the CEO of PowerMark, a Southern California Marketing Firm, wrote a column in Sales Gravy Magazine about the critical importance of retaining customers in the current recession.
Sales Professionals are the leading edge of business. We are the elite business athletes who companies count on to drive top line growth. But Marketing CEO Colleen Edwards argues that during a recession salespeople must become laser focused on preserving their current customer base. She believes that right now the balance most salespeople maintain between bringing in new sales and managing their existing account base must become weighted more towards account management and customer retention.
Colleen says that “In healthy economies, your focus is often on all-important top line growth. During a recession, protecting your core revenue base, the lifeblood of your business, must become your critical priority. Because if the revenue stream that funds basic operations gets too anemic, the consequences to the company could be catastrophic. Every employee in your organization is relying on the sales team to do everything in its power to keep the revenue flowing and the company healthy.”
Like it or not, we are in one of the worst business climates in our lifetimes. Hoping that things will get better is a losing strategy. Companies are laying off thousands of workers and jettisoning goods and services normally purchased because they are no longer considered mission critical. If you are not in there with your customers as a consultant giving them reasons to continue buying your company’s products are services you are playing Russian Roulette with your revenue, bonus, and career. As Colleen says, “Now is the time to take serious action.”
Fortunately Colleen and her PowerMark team have developed a five-step program designed to help you and your company retain your customers.
Step one is to stack rank your customers in order of revenue and profit contribution. Then segment them into categories or levels based on their order in your ranking.
In step two analyze your current customer retention efforts. You need to understand what your current outreach program looks like. What are your customer “touch points?” Are they receiving daily, weekly, quarterly or just spotty personal contact? What percent of the revenue generated by your top customers are you reinvesting back into customer retention programs targeted at these top customers? Are all customers treated the same or do the most profitable customers get a different level of attention?Step three is to evaluate the effectiveness of your retention programs. The best way to do this is to step into your customer’s shoes. Would your outreach programs make you want to buy more from your company? Would you feel like your company really cared about you as a customer?
With step four you will determine the optimal level of outreach for customers based on revenue and profit contribution. Decide the frequency, impact and types of touch points you want for each level or category of customer. Determine what percentage of revenue you’re willing to reinvest to show customers that you truly care.
Finally in step five develop your customer retention program based on what you learned from your analysis in steps 1-4. Then execute your plan. If you don’t have internal resources who have bandwidth or the right expertise, outsource it. Retaining your customers is too important to put off another day and the quality of your program is critical.
According to Colleen this simple process will help put your finger squarely on the pulse of your highest value customers while they’re still customers. When you do, you will:
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Enhance customer loyalty
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Preserve core revenue
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Ease account penetration
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Promote customer referrals
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Differentiate you/your company from competitors
At some point in the future we will come out on the other side of the recession. Putting a focus on customer retention will not only help you maintain your current revenue streams now but will position you to grow even faster when the economy turns around. Because, as Colleen Edwards says, your customers will know you care, they will have seen you at your best when times were tough, and because of this they will reward you with even more business when things get better.
To learn more about Colleen Edwards and PowerMark visit her at www.thepowermarkgroup.com.
This is Jeb Blount, the Sales Guy. To get more advice from today’s top sales experts like Colleen Edwards subscribe to Sales Gravy Magazine free at SalesGravy.com. If you have a sales question please send it to salesguy@quickanddirtytips.comcreate new email.
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