Do you have a solid customer retention strategy in place? Or would you prefer not to think about this?
Let’s say you work for a company with a selling culture that constantly pushes new business acquisition rather than customer retention (pretty much most companies). Every quarter you are caught between the proverbial new business rock and an account renewal hard place.
Which clients should you pay attention to? Which accounts are priorities? Which leads should you pursue?
Selling cultures make the pursuit of new business exciting and enticing for sellers. There are contests, prizes and recognition. Let’s face it. New business also is far better compensated than the commissions paid for renewals.
That scenario leaves your renewal customers at a competitive disadvantage.
For businesses selling annual subscription services, renewal customers are out-of-sight, out-of-mind until the quarter (if that early) prior to their contract coming up for renewal. That’s no customer retention strategy at all.
That status quo scenario means the majority of your reps visit customers once a year, yup you guessed it, at renewal time. These reps push last year’s contract in front of a decision maker’s nose to sign, with a minor increase in contract size due to your annual price increase. Boring…. For your customer. Your sales rep demonstrates complete lack of attention to that customer – which doesn’t help your brand strategy either.
The status quo wins. Most selling quotas focus the sales person on continuously hunting down new business.
What if we turn the tables on the sales process status quo?
What if part of your sales strategy remains focused on continuously looking for renewal opportunities within your existing customer base?
Regardless of whether your company provides rubber bands or space shuttles, current customers are the key to growing, expanding and sustaining your business – regardless of the size of your organization. Creating a solid customer retention strategy during the first sale ensures that you remain top-of-mind afterwards – even if your clients do not require additional products and services short-term.
Customer retention strategy which leverages renewals casts your reps and employees as go-to resources of industry knowledge for current customers and the key to their competitive advantage.
OK, here’s a sports analogy (or two) to help you out. The best players on the court, or ice, or field, are the ones who remain engaged in the action even when they do not have the ball or the puck. They create opportunities downfield, two or three plays later.
Customer retention strategy requires sales vision.
Customer retention strategy includes upselling and cross-selling opportunities which can and will present themselves during your customers’ respective lifecycles. If you are paying attention.
These opportunities allow you to grow your relationship with and knowledge of that customer. The more invested you mutually become in each other, the more valuable your renewal contract becomes to the sustainability of that client.
Clearly there are sellers on your team who are those proverbial new business hunters. They have little or no interest in a customer retention strategy. In their minds, customer retention is a post-sale process.
Clearly there are sellers on your team who, like me, are customer retention strategy and execution superstars. At the end of each quarter – let alone each year – their renewals are over 100% (achievable when you are upselling and cross-selling).
A customer retention strategy which leverages renewal specialists comes in very handy, especially during economic downturns (like the one back in 2007, anyone remember?), alterations of the supply chain, rebounding from poorly-conceived new product launches and just about any other curve thrown at your sales culture.
Do I have your attention now?
Customer retention strategy makes you look at your business model differently. Over the long haul, everyone in your company becomes responsible for driving revenue through your organization – regardless of whether it is stated in their job description.
Who do your reps need to collaborate with to leverage their customer retention strategy?
Customer retention strategy involves collaboration across your entire organization. When everyone is actively engaged in identifying opportunities for renewal, your sales pipeline increases exponentially. Sometimes the folks you marginalize from the sales and customer retention processes can have the biggest impact on that client’s decision to continue to do business with you and your company.
Think what a collaborative workforce engaged in customer retention can mean for your business strategy.
Babette Ten Haken is a management consultant, strategist, speaker and coach focused on customer success for customer retention. As a sales newbie, Babette walked into her first manufacturing plant – a slaughterhouse in Oklahoma – over 25 years ago. She fell in love with manufacturing (and yes, she was/is a customer retention superstar). Babette serves manufacturing- and engineering- intensive companies, focusing teams on creating enduring business outcomes. Babette’s playbook of technical / non-technical collaboration hacks, Do YOU Mean Business? is available on Amazon. Visit the Free Resources section of her website for more tools.
Image author: Robert Wilson. Image source: Fotolia.