“The essence of selling is figuring out how what you’re offering will help customers accomplish their objectives–not your objective, their objectives. Anything else is pointless and self-serving.” – How One Entrepreneur Learned to Sell
Building and sustaining a successful business is not easy in today’s competitive marketplace. The key to keeping a strong business is retaining customers for the longest time in order to foster loyalty and brand affinity. Profitability comes from existing customers – the 80/20 rule, which states that 80% of a company’s business comes through 20% of the company’s loyal existing customers. The foundation of a successful business would be to ascertain and determine whom these 20% customers are, and then go all out to cater to their every need and satisfy every expectation. The existing customers, who have stayed with the company for a while, have value – both financially and from a partnership and loyalty point of view. They have faith in the company and its products, and such faith is not easy to build, but is extremely easy to lose, and then a company not only loses existing customers, but several potential ones too.
With time, companies are increasingly realizing that it is a lot easier, faster, and cheaper to sell more and consistently to existing customers than it is to gain new customers. For companies to become and remain successful, they must increase the CLV (customer lifetime value) for each customer by nurturing the relationships and creating bonds with them. In order to retain and leverage the power of existing customers, companies must look at personalizing the relationships, building rapport, remaining available for the customers, and consistently communicate with them. It is therefore, necessary to nurture the existing customers, listen to their needs, and deliver top class customer service in order to retain them for the longest time. Paying regular attention to the existing customers will help a company become more profitable and maintain a sustainably successful business.
In the realm of managing existing customers, the main thing is to know them well. Companies are now spending an increasing amount of resources on CRM solutions to help them deliver better service to existing customers, thereby increasing loyalty and profitability, as compared to selling to new customers. As companies expand, it becomes increasingly difficult for them to maintain an accurate and relevant customer base, with relevant details including customer history with the company. The departments within companies that have access to these details, seem to ‘hoard’ them, working in silos, rather than centralising this valuable information. The combination of understanding customers and using CRM tools will enable companies to appear distinctive and deliver uniqueness, while having the ability to upsell and cross sell.
Many companies make the mistake of first trying to sell and then forging a relationship. However, the starting point of retaining and selling more, to existing customers is gaining their trust. The challenge is that trust does not happen overnight – it takes years to build and would happen only when the company consistently delivers on customer expectations. Customers today receive information and product choices from the many market players, many of whom have not built a relationship with the customer. Hence, while customers are ‘hit’ with information from even reputed brands, they tend to move towards companies that they know, like, and trust, since they would rather remain with such companies than risk expending effort and money on companies they would be unsure about. Existing customers are one of the most potent and effective asset of any company and the more customers a company is able to retain, the better would its revenue and profits become over time.
It has become even more imperative for companies to remain a trusted and reliable ‘partner’ for their customers, given the highly competitive market, which is becoming fiercer by the day. Existing customers will remain when a company can consistently help them tide over their problems, add value to their business, and just be there when customers need them. For a company to be able to sell more to existing customers, it should be able to convince them of its reliability and trustworthiness not just in the present but in the future as well. Building trust, as mentioned, is a time consuming process, which must be developed consciously – open and regular communication and a focus on the customer are effective ways to do so. Existing customers and prospective ones too, should be able to trust that the company they are in business with or would want to go into business with. They must be able to believe that the company has their best interests at heart and will do everything possible to help its customers achieve their goals. Research shows that most of the issues that customers have with companies, arise from poor and inconsistent communication and a mismanagement of the relationship with the customer, which ultimately leads to a breakdown of trust and compatibility.
The foremost method of selling more to existing customers is a company’s willingness and ability to listen and act on the feedback provided by customers. When companies listen and act on customer feedback, they would be able to customize their products and personalize solutions for their customers. The idea is to increase the level of satisfaction that existing customers have with the company – the happier these customers would be, the better brand advocates they would become, thereby attracting more customers for the company, and providing repeat business. Companies must deliver on what customers expect – this is the most basic requirement for building trust and a sound relationship with customers, which in turn makes for lucrative opportunities to sell more – a complete cycle, which then becomes a habit.
For existing customers to remain so, it is necessary for them to know that a company would be able to do what it promised and what it is set up to do. If a company portrays itself as a low cost high value service provider, this is exactly what customers will expect not just in the present, but going forward too. The fact however, is that customer expectations do not remain the same – they are dynamic and unless a company can keep pace by altering its value proposition, it would never be able to satisfy its existing customers, let alone prospective ones. The comments and testimonials of existing customers is the best way any company today can gain new customers – the feeling of ease that new customers would get from the opinions and views of existing customers will never happen irrespective of the claims from the company. Hence, not only do existing customers provide repeat and increased business, they can potentially act as highly effective sales personnel for the company.
It is necessary for companies to remember that customers are real people, with the same feelings and problems as anyone else, and hence must be treated as individuals and not sales numbers. Companies may believe that manipulating customers through loyalty programs, incentives, and other such ‘lures’ will keep customers for a long time. This may be the case short term, but eventually what customers expect is top quality service, courtesy, respect, and delivery on the promises a company makes to them. If companies expect to succeed and retain their existing customers, they must align themselves to the customers, giving power to customers to ‘subscribe’ to a relationship which they know would provide value to them. Companies must keep customers at the centre of what they do by first placing themselves in the ‘shoes’ of the customers to gain a well-rounded insight of how customers view them. When a company focuses on strengthening its bonds with existing customers through every possible means, these customers respond whole-heartedly and help companies become successful. How many existing customers does your company have?