When Customer Retention becomes a Sales Spectator Sport

When customer retention processes become a sanctioned sales spectator sport, everyone suffers. Especially those valuable clients who are abandoned once the contract is signed.

What could go wrong, post-sale? Besides, the post-sale care and feeding of those valuable clients is SEJ: Someone Else’s Job. After all, sales professionals are compensated for acquiring customers, not baby-sitting them, right?

Well, not so right. And here’s why.

We all know that customer acquisition costs as much as 5 times the cost of customer retention. However, here’s the dichotomy. Sales reps are handsomely compensated for winning new accounts and compensated at only a fraction of this amount for retaining them.

So, in the sales reps’ best interest, they devote their time and energy to activities that make them the most money. When it comes to customer retention, they tend to watch from the sidelines until it comes time to renew that contract. At that point in the customer retention process, the reps once again are compensated (but not necessarily well-compensated).

Which brings us back to the fact that customer retention becomes the responsibility of everyone else in the organization who was not continuously (if at all) connected to the customer acquisition process.

No matter whether you are a startup, entrepreneur, small to midsized business or large enterprise, quantify the processes you have in place to retain that valuable customer. It doesn’t matter whether you sell coffee, the latest App, manufacturing outcome, medical device or software system. Are your processes:

1. Anecdotal or documented?
2. Ad hoc or proven?
3. Reactive or proactive?
4. Collaborative or disconnected?

Because, otherwise, every employee (not just the marketing or marketing research folks) has no idea why customers continue to do business with your organization. And customer discontinuity can be a big problem if you are a:

1. Startup competing for funding;
2. Micro-business poised to become a small business;
3. SMB competing to land long-term contracts with the big boys and girls;
4. Business trying to grow, expand and sustain themselves towards Exit.

Customer retention is a collaborative, cross-functional sport. No one sits out any aspect as a sanctioned spectator.

Enlightened organizations, regardless of size or company age or pedigree, understand how everyone contributes to retaining customers, post-sale. Everyone has a role to fulfill and everyone understands how their role enhances everyone else’s role.

That enlightened focus is client-focus.

When everyone rows in the same direction, clients have a greater probability of being successful. And loyal. And retained.

Due to everyone’s efforts.

Otherwise, the sales folks are continuously replacing clients who have defected. And those sales folks, by the way, have an average turnover rate of 20-50%. So, not only are you replacing customers, you are replacing the sales reps who initially acquired (and then lost) those customers.

So, the only continuity in this scenario is discontinuity. In fact, the only common denominator are the employees responsible for the post-sale care and feeding of those valuable customers. Why? They tend to stay in their jobs longer than 12-18 months.

Overall, clients suffer as a result and ultimately vendor revenue suffers when customer retention becomes a sales spectator sport.

My advice: walk on the wild side of customer retention. Take a chance (which is not even a risk). Realize the opportunities of creating cross-functional pre-sale teams who are capable of continuing the magic, post-sale. It’s not that difficult to accomplish.

That translates into loving your customer retention folks (and compensating them). Not only that. Your customer experience, success and retention specialists are best-acclimated to the customer’s voice. And you know what that translates into? More customers. Acquired.

Isn’t it time to discover how to put this system into place?

Next steps towards not being a spectator, when it comes to customer retention:

1. Read these related posts on professional innovation, workforce engagement and customer retention. 
2. Has what you read today started you thinking about tomorrow? Contact me and let’s discuss.
3. Subscribe to my blog. Share your email address in the red box in the right column. Never miss another insightful post.

Babette Ten Haken serves organizations as a corporate catalyst and innovative speaker, strategist, coach and storyteller. Babette’s One Millimeter Mindset™ Workshops and Speaking programs leverage collaboration to catalyze professional innovation, workforce engagement and customer retention, especially in challenging Industrial Internet of Things environments. Babette’s playbook of IIoT team collaboration hacks, Do YOU Mean Business? is available on Amazon. She is a member of SME, ASQ, SHRM and the National Speakers Association.

Image author: rh2010  Image source: Fotolia