Small companies can easily fall into the trap of building a strong sales system to consistently “hunt” new clients and yet fail to implement a “farming” system to maintain the clients already committed. This paradox requires keen management with solid metrics to indicate problems and opportunities in new sales and/or existing client relations.
In a national survey of small businesses, 61% say the majority of their revenue comes from repeat customers. Today, companies need to focus on “engagement” and not just loyalty.
As the old saying goes, “a bird in the hand is worth two in the bush,” so client retention can be the door opener for future opportunities, since existing clients provide valuable testimonials, references and referrals for new clients.
This check list helps you to evaluate the strengths and weaknesses of your existing client relationship and retention program. Engagement is the key to success.
- Who oversees service to your clients? Research shows sales people tend to be good at either hunting (finding new customers) or farming (serving and growing existing customers). Not both. Do you have a hunter or farmer serving your clients?
- Do you have an account plan for your clients? Depending on your industry and the size of the customers, you may create plans for all clients or just for the 20% who generate 80% of your revenue. Nonetheless, an annual account plan sends a strong message to every client that you truly care about them.
- How do you manage client expectations? Is your company culture focused on under promising and over delivering? Perhaps the opposite? Setting standards around expectations can help you overcome service issues.
- How deep is your relationship with the client? Research shows the vendor always thinks the relationship is deeper than the client feels. Focus on closing this gap. Here are some measures for deep client relationships:
- Did the client volunteer to provide a reference or referral without your prodding?
- How many people in your client organization do you communicate with at least once a month?
- Do your contacts cross various functions within the company? I.e. do you know the users, decision makers, budget holders, accounting department, etc?
- Do your contacts span various levels of management?
- Do they invite you to their social events? To meet other vendors? Remember your birthday?
- Do you use various types of media to communicate with clients?
- Your executives should have a regular schedule to check in with clients.
- Face-to-face meetings are critical to true relationships.
- Educational programs are always a way to show appreciation.
- Newsletters, blogs and seminars augment your true communication.
- How do you gather client feedback?
- Incorporate a regular cycle of face-to-face surveys.
- Written surveys and focus groups help to validate feedback from your account managers and sales staff.
- Annually, a “voice of the customer” interview by an independent third party will surface true feelings and sales expansion ideas.
- Are you helping the client?
- Do you provide them with sales leads and introductions to centers of influence?
- Are you participating in their charitable and community efforts?
- Do you provide education and training? Advance notice of product upgrades?
- Are you treating your employees well so they will treat your customers well? Should you measure this?
The last factor to evaluate is the diversity of your client base and percent of total revenues each client holds. Many small businesses find success bringing on one new client early that comprises 30%, 50%, 70% of their business and then become dependent upon that client. Anytime you find that one client comprises 10% of your revenue or more you want to diligently work to add new clients to offset this dependence.
McKinsey and Company reported years ago the easiest way to grow your business is to sell more of your existing products and services to your existing clients. This won’t happen without a keen eye on client service and engagement.
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