Let’s face it. Retaining customers is an important part of growing, expanding and sustaining your business. After all, having a loyal base of retained customers who love doing business with you is really profitable.
However (and you knew this “however” was coming), beauty is in the eyes of the beholder. So is customer retention.
When I speak to organizations and associations about Industrial Internet of Things (IIoT) customer retention, far too often all that sales teams want to hear are tools and tips for cross- and up-selling existing customers. That is their definition of “how” they retain customers.
After all, the logic goes, the more stuff you sell customers, the more obligated they are to continue doing business with you.
Consequently, individuals, teams and audiences are shocked to hear that retaining IIoT customers does not involve an “all about you” strategy.
Yup, I get it. That message is not entertaining; it certainly is not about tools and tips. OK, this is not the message you necessarily want to hear. Then again, you have a nagging suspicion that this message is what you need to know. Why? Because it is getting harder to successfully compete in IIoT environments.
If you are a leader, you already received this customer retention memo. However, business models are so entrenched in existing processes and practices, that you cannot see your way out, in order to make this critical, strategic pivot. Or can you?
Who is obligated to whom?
Now, within Industrial IoT environments, the stuff sold includes machinery with multi-year lifespans, requiring predictive maintenance programs. Also, software interfaces are in the mix, also with multi-year contracts. So, from the seller’s perspective, a stable customer base exists for the duration of the current multi-year contracts.
As a result, a seller-centric, cross- and up-selling strategy assumes that, once the investment is made, customers are obligated to do business with them for the duration of the multi-year contract. No matter what happens along the way. Hence, cross- and up-selling investments essentially are guaranteed.
Realistically, how valid is this myopic, old-school selling assumption? Perhaps, just perhaps, there is more than selling involved in the IIoT customer retention equation.
Is selling IIoT customers the same as retaining IIoT customers?
Now, let’s walk around to the buying and decision-making side of the business table. Clients have bigger fish to fry than whether, or not, a seller’s organization has up- or cross-sold more machines, software, grease and materials into the plant.
In their eyes, buyers perceive no permanent obligation to a seller’s organization based upon quantity of products and services cross- and up-sold. Here’s why.
First, manufacturing decision-makers are looking at the entire plant, not just whatever department is the epicenter of the seller’s universe. Also, clients simultaneously execute business and operations strategies that are not in sync with the seller’s strategy.
Business and operations strategies focus on how plant floor ROI impacts line of business profitability. Not just how products and service reduce downtime, eliminate costs and increase efficiency and up-time.
Consequently, in order to retain their business, year over year, decision-makers not only expect what is sold to perform better and better over time. They also expect impact on line of business profitability to become better and better, as a result.
Why? Not only do IIoT environments become more and more complex, interoperable and connected over time. Consequently, your clients’ own customers expect that your client will perform better and better over time.
Can cross- and up-selling activities, alone, answer their questions and deliver these client-focused outcomes?
Inability to address buyers’ strategic expectations becomes the primary reason most sellers do not retain customers, in spite of cross- and up-selling efforts.
In my Playbook, retaining customers begins pre-sale and continues throughout the customer lifecycle. Losing customers begins the minute the contract is signed, because IIoT environments are dynamic, not static.
Not only is the post-sale time period the critical juncture where executing contractual obligations starts. Also, this hand-off delegates customer retention to multitudes of professionals who are not involved in the initial, cross- or up-selling activities.
Customer retention is collaborative and cross-functional, not simply cross- or up-selling.
Subsequently, retaining IIoT customers involves executing a business-wide model and strategy, not just a sales exercise.
Retaining IIoT customers with yesterday’s selling and service models hasn’t felt “right” in quite a while, has it?
Of course, as long as you are making money, why rock the boat, right? However, isn’t it high time to retool and recalibrate your mindset? Focus on why the whole manufacturing environment is greater than the sum of the products, parts and services sold.
Now you are on to something relevant and valuable.
The next workforce generation is asking these questions. They are not tied down to yesterday’s obligations, including mortgages, college tuition and retirement programs. How do you plan on sustaining your organization through a workforce hiring model leveraging collaborative, customer acquisition and retention efforts?
Let me ask you a question: “Just exactly what is it that you are selling, these days, anyway?” Isn’t it about time to discover the answer to that question? Contact me and let’s dig in.
Babette Ten Haken is a corporate catalyst and innovative speaker. She serves organizations as a strategist, coach and storyteller. Babette’s One Millimeter Mindset™ Workshops and Speaking programs leverage collaboration to catalyze professional innovation, workforce engagement and customer success for customer retention. Babette’s playbook of technical / non-technical collaboration hacks, Do YOU Mean Business? is available on Amazon.
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