Sunday, April 11, 2010

Mind Your Customers and Mine Your Customers

Mind Your Customers

We recognize long before we get involved in business that the customer is number one. Just ask the kid with the lemonade stand or the Girl Scout trying to sell cookies. Kids get this reality that without customers there are no sales. There is an old philosophy that says there is never a bad time to do the right thing for the customer. Ultimately this will be good for the company too. In specific instances one can do the right thing for the customer to the short-term document of the organization. But if we take to take a long-term view of our business, then maintaining long-term relationships with our customers is critical to the ultimate success of our business. So smart companies do the right thing for the customer even if it cost them something in the short term, knowing it will ultimately benefit the bottom line and the reputation of the organization. Companies like Marriott and Nordstrom have been very successful taking this philosophy to the extreme.

The secondary reason for looking after your customers is that it costs at least five times as much to generate a new customer as it does to look after the existing ones. So looking seriously at the complaints or suggestions of your existing clientele makes good economic sense.

In such economic times as were experiencing today, maintenance of your customer base is more than paramount, but rather critical to your company’s existence. With people scrambling to stay afloat competition is fierce and this may mean sacrificing some margin in terms of price cutting to make it economically sensible for your clients to continue to do business with you. However, there is nothing that can replace old fashion customer loyalty when trying to maintain your customer base in good times and bad. Most customers do not want change vendors and establish new relationships and will often give you an opportunity to maintain their business in the face of competitive price pressures or even be willing to pay you slightly more.

Mine Your Customers

The thing we often forget is that the database of clients is worth something more than the amount of revenue they generate each year. The goodwill created with your customers over the years can be turned into opportunity if we just remember the basic metrics and strategies of generating and maintaining clients.

It is said that each person has a circle of influence of about 200 people. Now you can debate the actual number, but the reality is that each of us can influence the buying decisions of others whether it is for personal or corporate purchases. Why not use that hard earned goodwill by utilizing more customers to help you generate new business?

The same principles that helped us generate sales when our business was new, apply at any time a business is life. Why not engage each of your customers starting with the largest and most loyal ones, and ask them to give you a testimonial that you can use when new prospects ask for references. Better still ask them if you can post the testimonial on your website. The willingness of your clients to refer you or provide testimonials will give you some sense for what kind of job you’re doing or how satisfied they are. If they are truly happy customers they will go out of their way to do this for you. If not, your customers are sending you a message and you probably have some work to do. In either case the information is invaluable.

Remember, all of us are a little lazy at times. Even your clients’ best intentions may end up on the back burner because they have more important priorities for their own business. But if they promise to help you, don’t let them off the hook or forget you. Most people who make such offers do so in all sincerity and have every intention of fulfilling their commitment. Sometimes you just need to give them a little push with a friendly reminder or by providing a draft referral letter to save them time. Even if they don’t all follow through, you will have a few testimonials and a handful of warm leads which could lead to new sales. The revenue you generate from these potential new clients could be the difference in survival until the business climate turns around for all of us.

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