Nope, that’s not a typo! Wouldn’t you love to have more suppliers that you absolutely LOVE doing business with and who make your life easier, every time? Well, YOUR customers want that from you, so shifting your thinking to take your customer relationships to elationships will help you step up your game and leverage the profitability impact of effortlessly earning new customers and retaining existing customers for the long term.
Too many firms are still stuck in the “steak” of conventional marketing and sales efforts, perks, loyalty programs, and dealing with customer service issues including late, incomplete, or wrong orders and quality issues. The money and the competitive advantage of an elationship is in the “sizzle” of how you make it easy to do the job they’re “hiring” your product to do. That’s a strategic relationship, not a sales relationship. Let’s put some sizzle into your bottom line!
Three Ultimate Secrets to Long Term Customer “Elationships”
1. Identify WHO you want to retain because not every customer qualifies for an elationship with you
One of the workshops I do with clients is The Customer Profitability Diamond, which identifies your “who’s who” of profitable customers vs. those you’re losing your shirt on. It’s not a conventional accounting exercise, but instead identifies customer behaviors you can influence, and self-inflicted wounds you can eliminate to improve profits and manage your long-term customer relationships, so that you can transform your most valuable relationships into elationships.
I believe we want to retain every customer who helps us achieve our profitability goals as we help them achieve theirs… with only one exception. Abusive customers who are taking a toll on your staff should be exited quickly.
Until you know who’s who in terms of your most valuable customers, not based on revenue but based on profit, you don’t really know how to manage your time so that you can afford to invest in building long-term customer elationships with the most crucial customers and best partners who are keeping you in business.
Most leaders think their “biggest” customers deserve that honor. I’ve seen a lot of those big revenue customers end up in the abusive and unprofitable end of the Customer Profitability Diamond. Your time is scarce; you need to know who to spend it with before you start building long term executive-level customer relationships. Want to find out more about the Customer Profitability Diamond? Pick up a copy of my book Profit in Plain Sight, or give me a call and I’ll walk you through it.
2. Build a proactive customer loyalty and retention plan.
I’ve written many a blog post on the 5Rs or proactive customer elationship management, but it always bears repeating because I still find that many executives are locked into outdated sales models. It’s simple. Once you’ve created your Customer Profitability Diamond, you can create what I call an OCEANS of Opportunity Action Plan to target 5 categories of customers.
OCEANS stands for Opportunity & Customer Engagement Aligned with NPS & Service, and it’s a powerful tool to identify the time, effort, and investment required to properly serve each category at an elationship level:
- Your most profitable customers, whom you must Retain when it comes to customer loyalty and retention, these customers are make-or-break for your business.
- Marginally profitable customers where there are low-hanging-fruit opportunities to Ramp up their level of business with you, and improve customer loyalty by serving more of their needs.
- Customers currently costing you more than they’re worth, whom you can Restore to breakeven or better. Most often you can get them turned around because often your company’s self-inflicted wounds are the cause of the profitability issue! However, there’s no value to retaining existing customers who continue to cost you more than they’re worth.
- Lost customers who will do business with you again when you implement a Regain strategy. One of the most overlooked strategies in retaining existing customers is going back to those you’ve lost! The grass isn’t always greener with their new vendor… especially when you nail the art of elationships.
- Inactive customers who may be “dead or just sleeping” and need to be Reactivated are another keystone in building long term customer relationships because often there’s a reason they’ve gone quiet, possibly because you’re “out of sight, out of mind”. And it’s a simple strategy to implement and see results.
3. Get inside your customers’ heads to excel at retaining existing customers.
You need to invest some executive time with your Retain, Ramp Up, and Regain customers to understand how to create the kind of elationship value that keeps them coming back again and again. Once you understand how to save them time, save them money, solve a real problem, create a feel good, or provide peace of mind, you can skyrocket customer loyalty and retention. Best of all, while many leaders find this part daunting, you can actually achieve tremendous results in less time than you’re spending on email.
I train clients in the lost art of having Value Creation Conversations (VCCs) – which are similar to how old-time shopkeepers improved customer loyalty by really understanding what their customers needed, and then finding a way to get it to them. Many times when I’m speaking I reference the example of Sam Palmisano, former CEO and Chair of IBM, who met with a customer every single day of his tenure, NOT to sell servers and PCs, but to build relationships by creating value and long-term customer relationships. IBM has always excelled at creating elationships, and under Sam’s guidance, the input he received back helped transform IBM from a fading hardware provider to the “smarter planet” experts to solve today’s really big problems with innovative technologies of all types.
The first step in building long term customer elationships is to decide whom you most need to solidify your relationships with. Then, activate your 5Rs of proactive customer profitability management to create competitive advantage by helping them do what they’re really trying to do more quickly and easily and with less hassle than your competitors. Finally, invest some executive time to get inside their heads. Your sales team is responsible for selling the products and services you have today. You’re responsible for figuring out what customers will want to buy tomorrow… and why they should buy it from YOU.
#1 Bestselling Author, International Speaker, and Accelerator Anne C. Graham is on a mission to help 5 million business leaders and their teams double their profit per employee – or more – in less than one year, in less time per week than they’re spending on email per day. Her new book Profit in Plain Sight includes the 5-step proactive P.R.O.F.I+T Plan to do it. Connect with Anne on Twitter and LinkedIn.