TFT: When the New Wears Off
What to do when your honeymoon period is over with a customer
When you first get a new customer everything is great. Much like a marriage. If you are in a transactional business then maybe this post is not for you. But I still think there are some nuggets for you here. Consider, For 61% of small businesses, more than half of their revenue comes from repeat customers, underscoring the importance of customer retention. With a new customer everything is great. Sales are “up and to the right”, your product is the greatest, inventory is perfect and so on and so on. But at some point the new will wear off, the honeymoon phase will be over, challenges will come. Key is to prepare yourself for those challenges, by being ready, being honest and being connected to your customers. That’s what we are going to talk about in today’s TFT post. Thanks for sharing your time.
Be Prepared: The Ups and Downs are Coming
Having spent the last several years now, close to a decade, build customer relationships and growing accounts I can tell you one thing I have always encountered is ups and downs with customers. So first and for most, ready yourself for that. The downs are coming and they will be followed by ups, assuming you handle yourself appropriately. To be prepared understand key goals for your customers. Understand how you impact those key goals.
If your product stops working what does that mean for your customers?
Is their entire business shut down?
What about that next update you have, or the new product you are launching?
Will you support the old products?
Are you staffed for that?
These are just some of the questions that you should consider as a part of your regular strategic planning. For new product rollouts have these questions answered long before you release the new product. Consider stocking additional inventory and adding additional headcount to manage the change process with your customer. Yes this will be added cost, but what is the cost of losing this business all together?
Be Honest: Do Not Try to Hide Challenges
We’ve all tried something new that worked and we’ve all tried something new that did not work. There are always challenges to new product rollouts. That could be inventory, it could be technical, could be a combination. No matter the challenge be up front and honest with your customer. It may lead to some short term loses. The key though is it will lead to long term gains. We know that a mere 5% increase in customer retention can boost profits by up to 75%. The honesty will build trust with your customers. They will know that you have their best interest in mind, even when it challenges your business. So take the short term loses and build back better for the long term gains. You might lose this battle but set yourself up for winning the war.
Be Connected: Strong Relationships Make Big Problems Smaller
There are a number of times in my career that having a strong relationship has made some larger problems become a lot smaller. Having great connections on the front lines of my customer help smooth over challenges in inventory or service delivery. Have key relationships on the higher level helped process payments faster and get checks cut when the time came. There is no doubt that having relationships has helped me grow accounts and save accounts multiply times. This probably could be considered a part of the Be Prepared section, because in reality you are building these relationships to be prepared for those downs. The reason this section is separate is because you need the strong relationships build on a foundation of trust to be prepared for the challenges. So as you get prepared know that you need to be in front of your customers. You need to build relationships from the front lines to the board room, or at least as close as you can get. That way you can always pick up the phone and know you have a supporter on the other line. Strong relationships keep you ahead of the competition. As the saying goes, “I don’t have to be faster than the bear, I just have to be faster than you.” So build strong relationships and be faster than the competition.
Action Step
Scheduled 30 mins to review your top 3 to 5 accounts.
How prepared are you for a challenge with this accounts?
How connected are you?
What one thing can you do this week to improve each account’s preparedness?
Create one action for each account to complete before March!
Additional Readings
5 Proven Strategies for Retaining Your Best Customers
23 Customer Retention Strategies and Examples
A Startup Founder’s Guide to Customer Retention
Are you looking to improve your sales process or hire your first sales professional?
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If so, we’re here to help! Reach out to us with your specific challenges, and we’ll schedule a time to discuss how we can develop a customized plan to meet your goals.