You’ve slaved away, (or worked hard!) to gain a new client or to win more business from an existing client. You have received the plaudits for the revenue, feel proud of yourself and hopefully, you have earned some commission for a job well done.
Are you really going to stand by and let a competitor take YOUR customer away from you? I hope not.
THE NEW BUSINESS ONLY TRAP:
Too many salespeople focus too much attention on gaining NEW BUSINESS to make their targets, often overlooking the fact that if they kept what they had and built from there, then they would be even more successful.
Let’s Give You A Few Facts That Help Underpin Why You Should Make This A Priority.
It is significantly easier to retain an existing customer than to win a new one.
- So, put as much effort into both activities to significantly increase your results
A dissatisfied customer will tell between 9 and 15 people how bad you are. It’s known as “The Ripple Effect”.
- Upset existing customers make gaining new ones even harder to win
People buy from companies that they are comfortable with and trust.
- The concept of ‘trusted supplier’ can only be built on a personal relationship and positive track record
Most customer defections are due to not feeling valued by the incumbent supplier.
- The reverse of this is also true, showing the client that you want to do business with them and value their custom eliminates the key reason to leave.
PROTECTING YOUR CUSTOMERS HELPS YOU ACHIEVE YOUR TARGETS – A Unique Sales Training & Consulting Tip!
Imagine that this is your annual sales target:
In this example, you are doubling the amount of new revenue that you require to make your sales target and this scenario isn’t too far from the truth. It’s known as the “leaky bucket syndrome”. If you are leaking revenue from the bottom of your bucket you must put more and more water into the top to “fill the bucket” and achieve your targets.
As they say, “It’s not rocket science” but so many salespeople forget to plan and decide how much time should be taken to ensure you protect your existing client base from competitors before getting too excited about chasing New Business.
IS IT EVER OK TO LOSE A CLIENT TO THE COMPETITION?
This statement from an experienced sales manager sums it up I think:
“After 30 years in Sales Management, I understand that sometimes you will lose a client. The one thing that I cannot accept, though, is if a client stops trading and it comes as a ‘surprise’ to the sales person. If this happens then I hold them 100% accountable for the loss”
This quotation is mine. If we ever lost business without being notified first, if we were not given an opportunity to review our pricing or service, if we weren’t given any kind of “heads up” that our business was under threat, then basically it meant that the sales person did not have a good enough relationship with their contact. By the way, not one sales person has ever challenged me on this, they have all thought it was very fair and agreed.
So, of course, sometimes even the best salesperson will lose business from a client. It’s completely unrealistic to say that you will never lose business. But the key is to make sure that you always view protecting your customers as one of your sales priorities.
THE COST OF LOSING EXISTING CUSTOMERS
The reason that I feel so strongly about staying close to our customers and protecting them from our competitors is that I know how hard it is to win business in the first place. Too many hardworking salespeople are criticized for missed targets when with a little more planning and understanding of what impacts their results they could probably be superstars.
To help explain, let’s again use a simple fictitious customer scenario that I use in my Sales Training and Consulting workshops.
Here is ACME Inc.’s profile as a customer:
- Annual Billing AED 240,000
- Profitability 20%
- Annual Profit for us AED 48,000
Let us now consider what would happen if we lost this customer due to lack of contact by us leading to them feeling undervalued and vulnerable to our competitors.
- By spending AED 2,000 you have secured AED 46,000 and the profitability of the customer is still more than 19%, a very healthy return. And at a 20% profit, it would mean you must find a new client billing AED 230,000 replace them.
So, we have looked at why protecting your customers makes sense.
- It’s an easier way to grow revenue
- It costs less and helps you achieve your targets more easily
- It makes chasing new business less critical
- Lost business almost always has a negative impact on the company’s results
Some things in life are difficult, but taking the necessary steps to actively manage your customer relationships so that your competitors don’t get a look in isn’t one of them. Professional salespeople understand that time spent nurturing their existing customers is time well spent. Look after your existing customers they are too valuable to take for granted and always very hard to replace. Unique sales training modules can help you achieve your professional goals.
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