Increase Your Profits by Keeping More Customers!
By Colleen Francis
Who are your customers, and what do they really want?
Knowing the answer to this question can help you to keep your customers longer, sell them more products over time - and increase your profits by between 75-95%. Given that the potential rewards are so great, what can you do today to dramatically lower your rate of customer departures?
First, you need to understand where those big numbers are coming from. While the figures can vary from industry to industry, retaining more customers will result in significantly higher profits and revenues for three key reasons:
- Selling more to existing customers is 5 to 15 times less expensive than acquiring new customers (less advertising, less direct mail costs and much less time);
- Loyal customers will often refer you to their family, friends and colleagues, further reducing the time and cost of acquiring new customers and closing new business; and
- Every time you lose a customer it takes time - and effort - to find a replacement.
So how can you reduce your customer departure rate?
By keeping your customers happy. The key to keeping your customers happy is to know what they want, and then find the product that provides them the best possible value - that's it.
I can't tell you how many deals I've seen go sour when an over-exuberant salesperson on the brink of closing a big deal has blown it by saying something along the lines of: "Mr. Buyer, this product is exciting because not only will it give you A, B and C which you need, but also D, E, F and G!"
Adding bells and whistles to a presentation by offering features that the customer has not said they want will only create objections and foster doubt in the customer's mind. Even worse, it may lead them to start asking themselves whether they are paying more for extra features they don't require - just when they were about to place their first order.
To help you keep your customers happier and longer, try some of the following best practices carried out by firms that excel in client retention:
1. Measure your current status
A very effective technique is the "third-party interview." While many customers often won't tell you directly the things you most need to hear, they usually aren't nearly so reticent - or so flattering - when a third party asks them for feedback. To find out what your customers really think of you, consider hiring a consulting or telemarketing firm to conduct a customer satisfaction survey on your behalf.
2. Confirm the criteria for success
Determine what's most important to your customers, and make sure your definition of success is consistent with theirs. Sales people often mistakenly operate from what they think is important. Instead, try to identify your prospect's true challenges, by asking leading, open-ended questions that allow the prospect to reveal their real needs, like:
"John, when I speak to executives like yourself, they often tell me that although their business is going great, they have concerns about (a problem your product addresses). Is this a problem for you?"
"Mary, when I speak to executives like yourself, they find that our products are able to solve problems in one of three areas: (specify three key issues your product addresses). Are these problems ones you can identify with?"
The key is to pick a few serious or common problems that your product can solve. That way, you are almost guaranteed your prospect will admit that they are having the same problem, and then you can follow up by asking them to be more specific about the problems they have. Remember that as a general rule, a salesperson should talk only 20-30% of the time, and listen the remaining 70-80%. This will help you determine which product features or benefits you should focus on - and which you shouldn't.
3. Know your customers
To serve a good client well (and to decide which clients merit the best service), you need to fully understand their strategic direction, how they operate and who makes their decisions. You or your salespeople can collect this information by writing up account plans for your largest or most profitable accounts, including a review of their industry and revenue projections, as well as how you are positioned in the industry, the threats to your position, a plan to expand within the account, your most recent customer satisfaction survey results and a plan for building and maintaining executive relationships. Then, ask your salespeople to review the plan with your managers or executives, to get additional insights on how to maximize the opportunities presented.
4. Ask questions
Last but not least, remember that the most successful salespeople uncover specific problems, and then align their products as solutions to those problems - nothing more, nothing less. So what are the right questions to ask your prospects? The right questions are those that move them 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 other words, the right questions are ones that reveal true buying motivations, which will get the customer engaged in a real conversation.
Unfortunately, many customers have a tendency to become frustratingly vague when asked what's most important to them. Their first instinct may be to respond with generic or cliché statements like "to do a good job," "to work hard" or "to be sensitive to what the customer wants."
These phrases lack specifics, so it is critical that you clarify exactly what they mean. If your customer becomes vague, try asking some of the following specific questions, designed to elicit very specific answers:
- What are your top three priorities defining the success of this project?
- Specifically, what is most important to you?
- When you reflect on this project, what needs to be in place for you to feel that it is a complete success?
- What does success on this project look like for you?
- How will you do that?
- How will you deal with that?
- What plans have you made to handle that?
- How is that working for you?
- How do you mean?
- What have you done to fix that?
- When you say (insert vague word here), what do you mean by that?
- How will you use that to your advantage?
- How will your toughest competitor react to that?
- Is that what you really want?
If your prospect still has trouble being specific, make some suggestions to help them. And if they really don't know what they want, start by asking them what they don't want. Then explain that your questions are intended to help you better solve their problems - and serve their needs.
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Make sure you check out Colleen's latest book, Nonstop Sales Boom for powerful strategies to drive consistent sales growth quarter after quarter, year after year.
Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.
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