Customer churn does massive damage to any business because a ‘leaky bucket’ of revenue destroys confidence and the ability to invest. Unhappy ex-clients also retard business development activities and undermine marketing efforts. The best businesses instead harness the power of their happy clients for advocacy, and they measure and reward their staff on creating brilliant ‘customer experience’. Measuring customer satisfaction with systems such as Net Promoter Score (NPS) are essential for astute business leaders who drive a customer-centric culture.
Make no mistake; winning new customers is expensive and often difficult because empowered buyers are armed with research and they seek to commoditize seller ‘solutions’. Savvy buyers are also distrustful of ROI claims and sales messages when there is not an established positive relationship. On top of these factors, consensus-based decision making means that there are more who can say ‘no’ and there are, on average, five decision makers (or decision-making groups) who have to say 'yes'. The biggest competitor in complex enterprise selling is often apathy, the status quo / 'do nothing'.
Retention programs therefore deliver stronger return on investment and leverage the almost magical power of recurring [compound-curve] revenue streams. Selling to existing clients is comparatively easy compared with new account acquisition but how do you make sure customers don't fall prey to competitor? A simplistic approach is to 'stay close to them and sell more' but relationships today are not enough... we also need to create real value. Whether your customers ask you directly or not, here is their question that you need to address.
How can we derive greater value from fewer supplier relationships?
This question is what the smartest people inside your customer organizations are thinking. They understand that every supplier relationship costs time, effort and money to manage. They also know that concentrating their spending power should deliver better 'value' but they easily focus on price as the lever to pull. But sellers should set the agenda on value rather than price.
Get on the front foot, go disrupt yourself before your competitors do it to you. Deliver innovation for clients to reduce their costs and improve their businesses. Trade lower pricing with the requirement for customers to make greater revenue commitments and deliver advocacy (case studies, testimonials, etc.).
If you are an incumbent supplier with a customer that has upside revenue through greater scale or cross-selling other products and solutions. Secure a meeting their CEO and CFO on the basis that you are unhappy with the level of value they are receiving from you. Tell them that they are missing an opportunity to derive greater value from fewer suppliers, and that you want to move from supplier to partner by investing to deliver for them with ... (supply chain improvements, greater access to IT systems, share executive insights, etc.).
Never take a customer for granted. There is always an opportunity to provide greater value without reducing price.
As proof of the fact that price is not the most important factor in the decision process for enterprise buyers. CEB research published in The Challenger Sale shows what buyers really value when making their buying decisions. Only 9% is price and 53% is the level of 'value-add' provided through education, insights and a partnering approach to delivering the required outcomes and managing risk.
What is your experience is working with clients to be one of the fewer suppliers delivering greater value? How have you used this strategy to out-fox the competition in the best interests of your client?
If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website: www.TonyHughes.com.au.
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