There is a worry that keeps all business owners and leaders awake at night. Are my key customers happy and do they need more attention from me?
From this, you would think that keeping key customers happy would be a priority. But, actually, in waking hours it typically isn’t. Many businesses are too complacent about their existing clients, and are surprised when these clients defect, decimating their business.
Despite it taking five times as much effort to replace a client than retain them, clients are often given less love than prospects.
When business schools teach students how to manage corporate assets, the subject never includes arguably the biggest asset of any company – its customer base. Thus many executives have a good understanding of how to manage people, property, plant, equipment and even intellectual property, such as patents, copyrights and trademarks. But they generally know painfully little about managing important customers. That’s a huge folly because the defection of just a handful of major customers can cripple even a large corporation.
There are a number of reasons clients are lost. These include:
- Complacency – clients can often decide that their supplier is taking them for granted, even if it is not true. If this perception takes hold, you’re in trouble.
- Denial – companies mistakenly assume that just because an account has been with them for years, that customer will remain loyal.
- Missing warning signs – for instance, a loss of a key member of your staff or the client’s staff can damage the dynamics of a relationship. Or the clients may be dropping hints they have issues that you blithely ignore.
- Internal infighting over client – larger accounts will have several touch points within your business from sales to account management. If these people aren’t working in harmony, watch out!
- Lack of attention from CEO – the surest way to strengthen the relationship between your and your customer’s firms is to get top executives at both organisations involved. But the top managers at your customer companies won’t be likely to participate if they don’t see a similar commitment from the executives at your own firm.
Firms need to identify their strategic customers and then treat them like corporate assets. What are the criteria? As well as being good fee earners, they should be companies who desire a long-term relationship, and provide opportunities to grow revenues. On the defensive side, a customer whose loss might affect your reputation in your field (or share price) is a key customer.
Actions to protect and enhance strategic clients include:
- Make a executive level person responsible for, or sponsor of each key account;
- Develop a specific strategy (with appropriate resources) for each key account with CEO buy-in;
- Ensure the team working on the account has the requisite skills – don’t use your B-team; and
- Look to form a partnership with the client. Work to really understand their future plans and tell them yours so you can meet their future needs (and win greater business).
Robert Miller is the founder of Miller Heiman, and renowned as a world-leading expert on sales. Robert will be presenting at the Optimising the Sales Force Australia 2009 Conference which takes place in Melbourne 28-30 September. It seeks to provide sales leaders with tools to navigate uncertain times, with some of the most prominent sales professionals from around the world presenting on best practice (www.osf2009.com.au)