Do you have INTENTIONAL retention?

"There is only one boss.  The customer.  And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else." 

~Sam Walton (Walmart) 

What are you doing to keep your existing customers?  If you haven't examined your organizations behavior in this regard, it is time to wake up and stop being complacent.

I've sold for many organizations and been involved with keeping customers happy (key ingredient to ongoing relationship) with diverse structures in sales coverage, territories and managing relationships.  However, I have to say, very few had, if any, had a retention strategy.

Most organizations leave it up to their sales and marketing teams to be the keepers of customer perception.  Some even have pow wows with the big wigs to shake hands and hob nob to convey appreciation for the business.

Yet what happens if there is a savvy organization out you by savvy marketing message or a sharp sales pro who can infiltrate the fortress of your customer, shed doubt on the relationship, offer a better "deal", make you look bad?  Can you withstand it?  In the wide world of business, especially with economic turmoil, expenses are scrutinized relentlessly.  

I am going to hazard a guess, that most organizations are able to easily provide proof and documentation on the following:

• go to market strategy

• sales structure

• customer profile

• delivery

• pricing 

• marketing

• web presence

Do you have a strategy to retain existing customers?

Far fewer can articulate their strategy to retain  existing customers.  If so, more than likely it falls on marketing and sales:

• face to face appointments

• reviews of service delivery commitments

• warm and fuzzy outbound marketing programs

• direct mail, email, and campaigns to keep in touch with the customer

• events, promotions, webinars, technical support

It is great if you have all of those going on and those responsible are held accountable for:

• increasing revenue

• building client base

• brand awareness

• referral programs

But what about plain old retention?  How do you define your program?  Do you leave it up to your customer to ask for more help with:

• frequency discounts

• options to upgrade 

• changing needs:  growth, technology, globalization

• evolving regulations impacting them or their industry

I have to tell you honestly:  if your customer is going to go through all the trouble to ask you for your help, they may as well put it out there to see if anyone else can provide better options.  What does that spell for you: RISK.

The 80% / 20% Rule

It is a known fact that 80 percent of your sales comes from 20 percent of your customers. So why aren't you protecting that 80 percent?  Are you doing everything in your power to ensure that those 80 percent are serviced the hell out of?  I'd bet 90 percent would say yes.  I challenge you to define how?  Do you have a retention program?  Can you answer:

• How you ensure that your customer is 110 percent completely happy?

• How do you prevent your customer from going to market to price shop?

• How do you measure customer satisfaction?

• How are you proactively helping your customers?

What I am talking about here is "intentional retention".  You aren't leaving it up to any scapegoats in sales or marketing if you lose a customer or even a major account.  You have the support and a standalone program in place that outlines and defines how you keep those customers.  Savvy retailers, airlines and the like have loyalty and/or reward programs to assist with repeat customers.  However, in business, you don't have the luxury of having the numbers to have a sophisticated program that is intricate within your systems, web, marketing and sales systems.  Don't make any excuses:  you don't have time, you aren't that big.  That isn't any excuse.  Your survival depends on it!

It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.”

                                                                                             ~Henry Ford

What I am recommending you do is assemble all the chiefs in your major areas (accounting, operations, sales, marketing, technical, production, labor), bring out the drawing board, split into groups of three or four and ask everyone to answer the following questions:

• Identify who your best customers are:  create a profile

• Who pays well? 

• Who is not always asking for discounts? 

• Who are you best able to provide service for?

• What are the frequencies:  daily, weekly, monthly, annually?

• Do you have measures to identify churn risk (will leave you for the competition)

• What do you do if a customer is identified as a potential loss?

• How do you communicate with your customer?

• How would your customer identify in its importance to your organization?

• Who is involved when a risk is identified?  What is done?  Is there a process?

Define a clear objective

Bring forward each team's contribution then extrapolate what everyone agrees upon.  Of course, there may be some who are inclined to defend their stance.  Regardless, the discussion that will evolve should be eye opening, the heated debates unsettling.  While it may take a few sessions, you must create a clear objective consistently held out front:

1. The goal is to understand everyone's perspective (it's going to be a mish mash to start with) 

1. What is your retention strategy?

1. How are you going to provide a loyalty or retention program?

Let me tell you.  You can often capitalize on the big boys.  Granted, they have at their disposal lots of research, intelligence, structure, programs that you simply don't have because of your size.  What I'm proposing is you to decide how you can carve out that information into a niche that helps your company. 

Define your niche 

If so many big guns have loyalty or reward programs ask yourself what the purpose of it all is?  Then set out to define your own niche and create something that fits in with your size, capabilities and financial resources.  If you don't think this is important then I should have asked at the start:  what will it cost your organization to lose a customer ... if you don't have an intentional retention strategy?

 "The well-satisfied customer will bring the repeat sale that counts." 

~James Cash Penney (JC Penney) 

~CUSTOMER CARE ~

 "Let's take care and protect our customers -- or someone else will." 

Customer cycles or sales funnels?

"The top salesperson in the organization probably missed more sales than 90% of the sales people on the team, but they also made more calls than the others made."

                                                                                    ~Zig Ziglar

The difference between a customer journey and a sales funnel - is your perception of either.  Inexperienced sales rookies are coached to label what phase their customer is at in their buying cycle by their management and/or organization.  The most definitive one you tend to see is divided into thirds .... commonly referred to as "the sales funnel".

The top third and widest with the most numbers is "Suspects".   Otherwise referenced as leads.  You are at the beginning, likely haven't met with a decision maker, or even understand why or how they buy.  They  have been identified as a potential customer by:

1. Cold calls
2. Lead generation
3. Referrals

The second tier is "Prospects" or called opportunities.   Are a mid-volume of numbers.  Prospects have moved from being a "Suspect" to a "Prospect" because they have been qualified.  The sales professional has identified them as a potential customer from a number of avenues: 

1. Web contact inquiry contact 
2. Inbound telephone call asking questions 
3. Internal leads:  referrals, heads up or personal recommendations
4. That first meeting, cold call
5. They've been identified as having a need that your company can fill
6. Follow up from cold call, or investigative meeting
7. Someone has read or shared information that shows where growth may be
8. Knowledge of key players are:  decision maker, influencer, user, authority, payment
9. They have the ability to pay for your service or product
10. Who you are speaking to has  the authority to make a decision to move forward or will simply be making a recommendation or gathering prices
11. What internal endorsement is required to proceed with providing a solution, quote or proposal or be established as a vendor, provider or partner
12. A decision will or can be made based on the need you can fill

The final third tier is "Customers".   These are the fewest numbers.  They have traveled through the funnel to arrive at a transaction, contract or agreement to buy.  They have satisfied your organizations criteria to do business or you have met their's:

1. Set up an account: met credit requirements:  credit check, references
2. Have the ability to pay:  financial resources, how or when and authorized by someone
3. You have identified that your prospect wants or is willing to pay for your service or product
4. You understand their buying frequency:  one time, annual, intermittent, monthly, daily, etc.
5. You understand how they work and how to work them within your own system or processes ... sometimes customized
6. You know their structure and where they may buy from:  global, national, or local 
7. They have issued a purchase order (PO#), requisition or cheque to buy
8. You have broken them down by value to your organization:  major account, corporate, enterprise, business, entrepreneur, consumer
9. You have systems or structure to match their buying:  an account executive, major account representative, territory manager, sales representative, customer service
10. You have adapted your structure to mirror your customer's behavior:  single point of contact on major accounts or enterprise sales, business to business local or global points of contact, order forms, web order systems, incoming telephone orders, fax'd orders (forms), catalogue, directories

The most successful sales professionals or sales oriented organizations match their behavior or identity system to that of the potential customer.  They understand where their customer is in the buying cycle:

1. Research
2. Information gathering
3. Price shopping
4. Vendor qualification
5. Who can provide the desired product or service to match what they think they want
6. Criteria outlined on how they will decide to act (make a purchase)
7. Established approved list of vendors or providers authorized to be purchased from
8. Budget accounted for
9. Approval process (by transaction or by location or by authority)
10. Payment structure
11. Review structure 
12. Service structure
13. Support to maintain orders
14. Ability to meet needs
15. Reputation to meet requirements or identify unknown needs and proactively fix gaps
16. Established trust

How you identify where you are at is important to create a language among your team as to where you are at in a sale:  are you on a fishing expedition or are you assembling your team of resources to put all heads together to put together a win-win proposal?

"If eighty percent of your sales come from twenty percent of all your items, just carry those twenty percent."

                                                         ~Henry A. Kissinger

Customer relationship management (CRM) systems have these areas identified and can populate into graphs or graphic funnels to help those:

1. Forecasting potential revenue, profit margins, marketing efforts
2. Budget resources:  people, equipment, processes, tools, systems, 
3. Have all the systems and resources in place or easily activated responses
4. Policies and procedures in place for escalations or when things go wrong or extra assistance required for customer are in place
5. People resources match customer orders:  equated to response time, hours of operation, scheduling

It is the footprint of your sales efforts success:  as both an organization and the customer facing personnel status in the customer's buying cycle.  I recommend that you break it down into bite size chunks so that they can be addressed.  If you are writing a business plan, a key component is answering:  "where and how will you get or retain customers?".  This should be long before you are looking for investors or financing to launch or continue operations.  I liked this diagram via Google by Andrea Callahan:

Ironically, most start ups and entrepreneurs gear up on marketing, outbound campaigns, telemarketing, sales coverage long before they have answered any of the above.  It can easily foreshadow failure over success.  Yes, you need to walk before you run.  However, assembling and identifying who are suspects, prospects and customers and where they are in the funnel, and the numbers associated with those numbers, clearly outlines the road map to monitor and manage growth.

It takes patience, practice and precision to be able to do this automatically.  The more adaptive or fluid you are in meeting demands are going to allow you to pinpoint the when, who and how to focus on your grow and ability to flourish.  If you recognize how you will move and keep pace with your customers at their speed, not your own, will signal a mature organization with a clear understanding on who is their customer and how great the relationship can be.

"Pretend that every single person you meet has a sign around his or her neck that says: 'Make me feel important.' Not only will you succeed in sales, you will succeed in life."

~Mary Kay Ash

The tortoise vs the hare

Selling to big corporations compared to selling to small-to-medium businesses is like differentiating between a marathon runner and a jogger!  Then, to make matters more confusing in come the dreaded acronyms that we take liberty with:  B2B (business to business) B2C (business to corporations) or B2C (business to consumers).

JOGGER (B2B) HARE

Sales to business are more transactional:  quantity over quality - the more activity, prospects in your sales funnel, the more likely you will close some of them (secure a sale).  Rookies to sales will start out in B2B and as they improve, they may (not always) be promoted and evolve into B2C sales.  You should be comfortable cold calling, knocking on doors and rebounding after being declined.  You are a quick closer.

MARATHON (B2C) TORTOISE

Selling to big corporations (sometimes referred to as enterprise sales) requires skill -- knowledge about the company, its people, culture, processes, needs, -- which requires a lot of research, endurance, and more training.   This is usually a step up from B2B sales and recognition for having put in the time to understand what your value proposition is (what sets you apart).  You create solutions, you identify needs before anyone else may.  The organization tasking you to sell B2C must equip you with all the necessary tools, resources, support but most of all TIME to be successful in this arena.  The bigger the fish, the longer it takes to reign it in.  You are a problem solver.

I took liberties with this blog by changing it up.  Essentially, B2B is selling to businesses which includes corporations.  B2C is often referred to as selling business to consumers.  I modified it simply because Business to Consumers rely less on sales professionals and more on advertising, marketing, direct mail, telemarketing, etc.  The skill and finesse required to sell to corpora-tions/enterprise is more complicated and should not be part of a start up strategy.  Chances are, as a start up, you won't have the compensation, resources, support or time to attract the skilled sales executive.  You can take just anybody and shove them out the door and tell them to knock on doors when you want simply a hunter for new business.

Take the time to evaluate what kind of sales professional you are or what kind of sales professional you want.  Turnover in sales will hurt you in the long run.  It sends a message to your potential customers that you value the sale over the value of those representing you. 

Read my biggest click blog:  Hunter, farmer .... Most companies will hire the hare instead of the tortoise.  The results are at the finish line.

One can't help but notice how often structure can defeat itself when most organizations decide they want the energy of the hare and don't have the patience for the tortoise.    We all know how that story ends.  Similarly, the results in sales at the end of the race can be the same.

I suggest that you need both.  I highly recommend you don't eliminate either. Understanding both styles and the benefits to your organization will allow everyone to flourish.  Primarily, expectations will be accurate, deployment of resources managed accordingly and timelines will be adjusted.