Top 7 Steps to Building a Profitable Customer Relationship

By Colleen Francis

Success in sales depends directly on your ability to make yourself likeable, and create a positive experience for your customers. The following 7 Tips are some of the best - and easiest - ways I know to help you create a more positive customer experience: 1. Love what you sell, the company you work for and the customers you serve. If you are truly passionate about these three things, your willingness to help your customers solve their problems will shine through. Customers will believe your sincerity and be captivated by your excitement. In short - you will be fun to work with. Our studies show that customers prefer to buy from sales people who overtly show that they believe in the products they sell, and the companies they work for. Choose to be honest, open and empathetic to your customers' needs, and you will experience consistent sales growth, build an excellent reputation and become one of the top performers in your field. 2. Be empathetic and compassionate. Truly care about your customers, and remember that no matter how good an actor you are, faking it simply won't work. Ask questions, take notes and lean in to show that you're engaged in their answers. When you take an interest in people, they remember you - and when people remember you, it's good for business. 3. Add value and give first. Share your network of contacts with your customers, and don't expect them to give you their business without you giving them something first. I don't mean give away free product in the hopes they will buy more. Instead, give away things that increase your value - like a referral to a partner of yours, a solution to a business problem that you read about or heard from someone else, or even help finding a new dentist! 4. Express your true intent. Tell customers upfront: "I don't know if there's a fit between what you need and what I have right now, but I'm hoping we can explore that in more detail during this meeting." Or: "I only have your best interests at heart, and I promise to be honest with you throughout our conversation. In the end, I hope that we can mutually decide if there is a reason to move forward. If not, that's fine too, and I hope you'll feel comfortable telling me so." This advice runs counter to 90% of the approaches I see being used in the field today. But then again, maybe that's why only 10% of sales people are top performers. Try it yourself a few times, and you'll be amazed at the response you get. 5. Don't go for the big decision all at once. In our personal lives, we don't propose to someone on a first date (at least, not usually!). The same is true in our business relationships. So get approval from the customer to move ahead in increasing increments. The first approval might be just to agree to speak openly with each other, as outlined in Tip #5 above. The second could be an agreement on a follow-up call time or meeting date. The third might be gaining agreement on the decision making criteria or a commitment to have the "big boss" present at the demo, followed by an agreement to a "go/no go" decision date. All too often, I see sales people jumping way

ahead of their prospect's buying curve. This puts the buyer and seller out of synch. When the sales person is trying to close while the prospect is still evaluating options or determining risk, trust is broken, the prospect feels pushed and the sale comes dangerously close to disappearing. 6. Use friendly, warm words. When you use simple language instead of formal "business speak," people respond better and trust you more. So limit your words to three syllables max. And don't try to impress prospects with your extensive vocabulary, or you may end up just sounding fake. 7. Ask the right questions. Successfully building agreement with your prospects depends on your ability to ask the right questions. What are the right questions? Those that move the prospect from an intellectual position of knowing they have a problem that needs to be solved, to an emotional state of trusting you to solve that problem in a way that will satisfy them. In short, the right questions are those that reveal true buying motivations. Mastering the right questions will ensure that you and your client build a strong relationship, wherein you can both succeed - and profit!

10 Critical Factors to Building Profitable Customer Loyalty

and why you have to do it, even (or especially) if the economy sucks by Sallie Burnett, Customer Insight Group So the economy is bad. You still have choices. You could slash your marketing budget across the board, cutting both profitable and unprofitable programs by an equal amount. Yes, it cuts costs - but it also makes a smaller company. Or you could stop marketing entirely - a survival technique that's the business equivalent of lying down on I-70 waiting for the next semi. Or - smart you! - you could decide to take action and stack the odds in your favor. You could decide to focus your newly limited resources on the area of greatest opportunity: your existing customers, specifically those who have high growth potential. The result is lower marketing costs and increased sales - not too shabby an outcome in any economy. If you choose to go this route, common sense, experience and statistics are on your side. According to the Customer Service Institute, it costs five times as much to attract a new customer as it does to keep an existing one satisfied. A study by Marketing Metrics found the average company has a 60-70% probability of selling again to existing customers, a 20-40% probability of successfully selling to lapsed customers but only a 5-20% chance of selling to a prospect. Losing a customer? That's where it gets really expensive. According to studies by the Technical Assistance Research Programs Institute, 91% of unhappy customers will never buy again from a company that has displeased them and will also voice their dissatisfaction to at least seven other people. The good news: Growth rates soar for those who are adept at loyalty. Frederick Reicheld, author of The Loyalty Effect and Loyalty Rules, found that loyalty leaders grow on average more that twice as fast as the industry average across a wide variety of industries. So - since I suspect I'm preaching to the choir here - most of us agree that loyalty marketing pays off, but it's the how that trips up most companies. Our experience shows that there are ten critical success factors to cultivating profitable customer relationships.

1. Leverage Your Data As Bill Gates said in Business @ The Speed of Thought, The best way to put distance between you and the crowd is to do an outstanding job with information. How you gather, manage and use information will determine whether you win or lose. Successful loyalty programs leverage customer insight to: y y y y y y Attract profitable customers. Determine allocation of resources timprove ROI. Evaluate how specific customers react tspecific promotions. Deflect competitive challenges. Identify trends and opportunities. Increase customer conversion rates.

Yeah, data can dall this. 2 - Create a Shared Vision In a true customer-centric organization, the vision has tbe clear and - equally important - embraced at all levels by all employees. Some key concepts: y y y y y Over-invest in coordination across all functions. Make sure everyoneunderstands program objectives, strategies, areas of departmental impact and associated expenditures. Encourage employees tparticipate in the program as customers sthey experience firsthand the program's value. Create high-level positions with the sole purpose of leveraging customer data across the organization and serving as the customer advocate. Encourage employees tthink like a customer. Incorporate customer focus inttraining and hiring.

3. Set Realistic Goals Sometimes loyalty programs are developed with good intentions, but unclear objectives. Woefully, this oversight can sabotage your program from the start. A program cannot be offered to the masses and exclusive, loaded with benefits andcheap. So, develop program objectives based on your primary business objectives. Do you want to expand marketing channels with direct capabilities to improve efficiency and measure results? Do you want to collect data to be leveraged as a core business asset? Do you want to build strong relationships with high value and high growth customer segments? You decide - but you have to decide. 4. Ask Customers What They Want If you want to know what will make customers more loyal - ask them. Focus on the features, program structure and rewards they would add or remove if they were to (re)design your loyalty program. Compare the benefits they want with the benefits they're getting. Based on your customers' feedback, determine the business impact of the requested benefits. Is it financially viable to give them what they ask for and does it ultimately achieve your business objectives? 5. Know Your Customers Look at the customer from a holistic perspective, then segment customers that are similar. Create a loyalty profile by ranking customers according to their value to your company, and then differentiate them by their life cycle and needs. The profile should be a 360-degree view, combining purchase behavior,

attitudes, satisfaction, demographics and lifestyles. Once you've created the loyalty segments, prioritize them to focus on their potential economic impact. Avoid rewarding free riders - loyalty members who join your program but give you nothing in return, and instead focus your efforts on profitable, loyal customers. 6. Make Rewards Attainable and Realistic Any incentive you offer must be realistically attainable within a reasonable time period. By design, a loyalty program is a balancing act between offering some low-cost, easily attainable short-term rewards that can be redeemed early in the program and more highly valued aspirational (and more costly) rewards that can be redeemed later in the program. While the short-term rewards encourage enrollment and ongoing participation, the beau ideal rewards serve as an incentive for your customers to consolidate purchases and award you greater share of wallet. 7. Create a Distinctive Customer Experience While some customers are moved by price, others want personal attention and convenience. Your customers are diverse; consequently, your program needs to acknowledge their uniqueness by speaking differently to each segment. The better you understand your customers, the better you can push the most appropriate levers for the specific customer. 8. Integrate A loyalty program is not a silver bullet to solve a company's core weakness. You can't manufacture loyalty if you offer shoddy products, poor customer service, noncompetitive prices, or non-integrated distribution channels, or if you don't communicate with customers. Instead, a loyalty program should be thought of as a part of your integrated customer relationship-marketing program - one that helps you to proactively manage the customer life cycle. 9. Be Relevant Depending on your business, customer touch points may include mail, telephone, fax, text message, email, instant messaging, chat rooms, catalogs, point-of-sale, signage, Web sites, online bulletin boards, and whatever was invented last week. New forays in Internet-based systems include blogs, video conferencing, podcasts and meeting-sharing systems. Each touch point has its own cost implications, and perceived benefits to your customer. In developing your customer communication plan, leverage each touch point to reinforce the value proposition and focus on what really matters to your customer - creating concise, relevant and compelling messages that build relationships based on your customers' needs. The key to success is to embed your loyalty program into the total customer experience. 10. Measure Success Customer satisfaction and loyalty metrics should be prominent in performance dashboards and visible to the company's leadership, including the Board of Directors. You should measure results in both the shortand the long-term. While short-term success is measured by evaluating the results of promotions, events and customer communication, long-term success is measured by RFV - recency, frequency and value. Recency is the measurement of when the customer last purchased. Generally it is a good indicator of potential defection. Frequency is a measure of how often a customer purchases; it gauges how robust the relationship is between your customer and the company. Value indicates the profitability of the customer; a decline in value can represent a decrease in transaction size and your share of wallet. Measuring value is more than looking at one transaction; instead it is a measurement of your customer's perceived value in the relationship. As Frederick Reicheld explains in The Loyalty Effect, Creating value for customers builds loyalty and loyalty in turn builds growth, profits and more value. RFV provides you actionable measure for enhancing and refining your loyalty program.

No matter what the economy is doing, the quest for loyalty offers bottom-line rewards for those who prevail. As unique as your customers are, so will be your challenges and successes as you build and refine your program along the way. The pursuit for customer insight shouldn't be taken lightly or without long-term dedication. Dig in. Dedicate for the long haul and discover that, recession or not, there's gold in them thar customers.

How to build profitable customer relationships

Written by Janet Boulter Leaders are demanding their companys grow and so marketers are continually focused on driving their products and services into the hands of new customers. Unfortunately this intense focus on attracting new customers has taken attention away from established or past customers.

It is a challenging time for most business leaders today. Leaders are demanding their companys grow and so marketers are continually focused on driving their products and services into the hands of new customers. Unfortunately this intense focus on attracting new customers has taken attention away from established or past customers. It is measurably more expensive to attract a new customer than to retain an existing customer. So why do so many companies focus their efforts and their dollars solely on new customers? It is because every organization is committed to growth and growth is associated with building new business. However, in order to maintain continuous profitability, companies must establish and maintain profitable relationships with all of their customers (past, current and future). Business leaders must do four things to have profitable customer relationships. 1. 2. 3. 4. You must continuously be attracting (profitable) new customers in the industry sectors that you have identified in your strategic plan. You must actively retain your (profitable) current customers and re-establish relationships with past customers. You must customize your product and service offerings to better meet your customers expectations and needs. Your employees must be continuously trained and rewarded for delivering exceptional customer service.

New Customers: The industry sectors that you have identified for growth in your strategic plan must be implemented throughout your company. Your sales team must have their commission structure designed to reflect (and reward) closed sales in the industries you have committed to pursue. When you are marketing and selling to your new marketplace you need to make sure that the products and services you offer are profitable. In other words, you must conduct a customer profitability analysis at the beginning of the sale, and periodically during the sales cycle. Too many companies focus their marketing dollars on their customers that are the largest revenue generator. Remember profits are revenue minus costs, so you need to make sure all of your customer relationships are producing the results you initially projected. Current and Past Customers: You worked hard to attract new customers to your business and know you need to continue to work to establish and strengthen the relationship you created. The more you know about your customers organization, their buying habits and patterns, their growth plans and their operations, the more successful you will be in designing your relationship programs to meet their needs. The goal is to be so familiar and become so indispensable to your customers that your company is the only one they consider when purchasing products and services. So many companies offer special pricing, bundled package offers or incentives to attract new customers, while completely ignoring their current customers. If you want to keep your customers from switching to your competitors (to take advantage of their new customer discounts) you need to create loyalty (recognization/appreciation) programs, and referral discounts and/or incentives. If you value your customers, then reward them for their continued confidence in your companys product and services. You might also consider instituting a frequent user program. The more business a customer does with your companythey can receive either a discount on future work (or purchases) or a free service.

Reach out to your customers on a regular basis to provide helpful information such as case studies, success stories, testimonials, and new product/service launches. Invite your customers to give you feedback on their needs/wants. The more inclusive you are with your customers, the more they will value the relationship with your company. Customize your programs. Technology has offered us a myriad of communication vehicles for reaching our target audiences. Technology is a tool to support customer service not to replace it. Always give your customers the option to talk with a human being. I know that having trained customer service specialists can add costs to the bottom line, but think how much business you lose, by not having someone available to visit with your customers when they need help, have questions or have a complaint that needs to be resolved. In order to exceed your customers expectations you must use your technology and marketing savvy to customize your relationship with each customer. Make sure your CRM (customer relationship manager) programs are integrated with your customer contact programs and you are working with your customers to understand how and when they want to be contacted. The more you know about your individual customers and can customize your marketing and sales program to meet their needs, the stronger your customer relationships. Social media is continuing to revolutionize they way we conduct business. Anyone can quickly research your company to discover your companys customer satisfaction history. Your companys reputation is one of your organizations most valuable assets, so make sure you are doing everything possible to maintain excellent customer relations and continually build a strong reputation for your company. Employees: People treat people like they are treated. In order to deliver exceptional customer service (a must requirement for every employee in your organization) you need to make sure the core values for your organization specifically address your commitment to your customers and your employees. Customer and employee satisfaction are intertwined and business leaders must recognize and reward employees for the value they continuously add to the organization. When things go wrong, your employees need the training and resources to turn your dissatisfied customers, into happy, satisfied, and repeat customers. Make sure you have a resolution ladder in place, so unhappy customers can immediately be connected to someone who has the authority to resolve their issue. In order for your company to create and sustain long-term profitability you must continuously develop and improve your customer relations. Treat your customers as the valuable assets that they are. Periodically conduct a customer profitability analysis and use your technology to customize your products and services to meet your individual customers needs and watch your companys growth skyrocket!