How do we make sure we don’t lose the customers we can’t afford to lose?
The Top 10 to 20 accounts of any B2B organization typically represent 60-80% of revenue and profit. In some cases, they are as high as 95%. The consequences of losing one of these customers are dramatic, and in today’s business environment, it is almost impossible to replace them, as our competitors will protect them at all cost.
Companies commonly retain customers the ‘easy’ way: by discounting prices, by increasing rebates, by extending terms, and by providing more for less.
This is highly tactical and ensures we open the doors to competition. There are better ways to manage our most important customers more effectively, and ensure we drive growth so they become a strategic asset instead of a strategic risk.
To build strategic relationships, we need to really understand our customers. To do this we must have a process. Just like other key elements of our business we need a process for relationships. We need to be able to identify, evaluate and build our key relationships, and then measure our progress against targets, just like we would for any other part of our business. So many of us just don’t do it.
So what’s the process?
Mapping our current relationships so we understand who is covering which person from our client’s company, and what are the relative strengths and weaknesses of those relationships.
What roles do the various contacts at the customer play: Budget, Gatekeeper or User?
Summarize the “map”. What are the issues? What are the problems and opportunities?
Establish specific Goals and focus by priority by person.
Link Key Initiatives that will accomplish the Goals for each person’s Goals.
6. Reviewing and Measuring
People’s positions and Relationships change, as do our business objectives. Ensure we are measuring progress and the “map” is updated at least quarterly.
Once we have our Customer Relationship Plan in place and it is integrated with our Business Plans as well as individual Performance Reviews, we can focus on the types of activities, and relationship engagement that our customer will perceive as real value.
Our mantra must be to build a strategic relationship. A strategic relationship is one that is a partnership built on trust and mutual respect that can stand the test of time, and the strains of stress through thick and thin.
But what is value to one customer may not be the same for another. Every customer has their own set of problems, people, circumstances, and challenges. Thus, once we know what our plan is to nurture and build the relationships that matter, we need to focus on what value means to each individual.
We need to learn about their organization, and where practical embed ourselves. What is the customer trying to achieve, where can we help and what are some of the skills we could help develop?
Too often we take for granted that others know who or what we know, that they may not. Depending on the customers business maturity and focus, we can provide help in all manner of areas, such as expertise in building a business plan, research we may have that they don’t, access to our network such as vendors, politicians and industry experts, and sharing our experiences with new markets or product opportunities.
From such insight and knowledge, we can build a specific Account Plan, which integrates everything we have learned about the customer and the relationships we need to focus on.
In today’s fast moving digital world of commerce, a CRM system isn’t enough to keep and grow our business with our most important customers. We need to be able to understand who is important to us and why. Then we can plan to improve and measure progress, review regularly and develop a strategic partnership.
A Customer Relationship Plan is an imperative, and properly created, communicated and executed, will ensure we don’t lose our stellar customers.
Peter M. Beaumont is a Management Consultant, Founder of ConnXN and is a Consultant for Pivotal Advisors. He is the author of The Relationship Roadmap and works with managers of B2B companies to increase profits quicker by managing Strategic Accounts differently. See more at www.ConnXN.net