Estimates that 20 percent of customers account for 80 percent of total revenues in some businesses is a wake-up call! Finding new business a climate like that is expensive, and often unrewarding. As Barry Stamos points out in “'Best' Customers: More Profitable Relationships” (Email Marketing Newsletter), “Why spend resources attracting new customers until optimizing the profitability of your client relationships?”
More Bang for Your Buck
Customer Relationship Management (CRM) is organizing and maintaining strategic connections with clients and customers to turn that sorry 20/80 stat on its ear.
“Successful CRM is about competing in the relationship dimension” explains Bob Thompson, CEO, CustomerThink Corporation, “Not as an alternative to having a competitive product or reasonable price- but as a differentiator. If your competitors are doing the same thing you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier--sustainable--relationship over the long haul.”
Putting Clients First
Service is a client-centric activity, but there’s plenty in it for you, too. For small-business owners (SBOs) and independent professionals, developing and managing healthy client relationships and providing superior service increases cross-selling and up-selling opportunities, and can spin off endless chains of high-leverage qualified referrals. Building on your client base also increases profitability, by cutting front-end marketing time and costs; but it’s the quality of those relationships that affects persistency, enhances your professional reputation, and can lead to future business from your hard-earned clients.
Technically, of course, when you make a sale, you don’t have a “client,” you have a “customer”. A customer is someone who buys from you once; a client is someone who will buy from you, again and again. Clients who trust you and your expertise will come to you (and maybe only you) for your products or services. A client relationship is one in which both the buyer and seller agree that the first transaction was not a one-time event.
Client Relationship Management goals are clear:
• Being seen as confident, competent professional;
• Proactively servicing your existing business and providing extra value;
• Meeting additional needs as clients’ situations change, and…
• Earning prestige recommendations or introductions to other qualified prospects.
The buyer must accept “Client” status, however, it’s not a label that can be stuck to the buyer by the seller. Client relationships must be cultivated and nurtured to stay healthy. To borrow a line from former New York City mayor, Ed Koch, simply asking clients, “How am I doing?” is a great way to find out.
CRM is typically characterized by continuous contact, shared expectations and mutually beneficial relationships evolving over time. The post-sale period must be carefully managed. Thank-you messages are courteous and business-like; progress reports may be useful in some situations.
Make a point of contacting clients informally several times a year, in addition to holiday messages and regularly scheduled service contacts. It can add up, but today’s SBOs and independent professionals have a really simple and powerful way of delivering much more value to clients with less effort, since virtually all client service contacts can be automated.
E-Communications – It’s Expected!
People have come to expect email service notifications and other communications…everything from thank-you notes, birthday and holiday greetings to cross- and up-selling messaging. If you’re not using automation technology and a Web presence to the max, you’re at a disadvantage (because your competitors are!).
At the same time, a lot of businesses are slow to acknowledge customer inquiries and service requests. Business research firm, Jupiter Research (http://www.jupiterresearch.com), found that nearly one-third of companies either took three days or longer to respond to customers' email inquiries or never responded at all. Bad on them!
But that can all be fixed with automated messaging built into e-mail systems. Meeting basic customer service needs in these ways improves persistency and client loyalty.
Just as understanding the people you're looking for makes it easier to find more of them, a market’s unique make-up can help you tailor appropriate client communications. As consumers become increasingly sophisticated, so does the benefit of targeting client communications, not just promotional messages, to their needs, interests and buying behaviors. With today's technology you can readily customize client communications to each market segment.
Smart CRM – Another Way to Succeed
CustomerThink Corporation’s Bob Thompson: “Said another way, you can succeed with CRM by being SMART: Define a customer-centric Strategy; use appropriate Metrics ; ensure your organization is Aligned with your objectives; Redesign work processes as needed; and use appropriate Technology tools as enablers. But it all starts by putting your customers first and creating a better relationship with them than your competitors offer.”
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About the Author:
Bill Willard has been writing high-impact marketing and sales training for over 30 years—but as Will Rogers put it: "Even if you're on the right track, you'll get run over if you just sit there.” Through interactive, Web-based "Do-While-Learning™" programs, e-Newsletters and straight-talking articles, Bill helps small-business owners and independent professionals get the job done.