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Sales Solutions
The Importance of Customer Retention vol 2, issue #13
August 1, 2004

Why is it important for you, as a sales rep, to spend time with customers you've already sold? After all, you're not getting paid for it - at least not as much as you would for bringing in new deals. "So what if a customer leaves? That's the company's problem - not mine. I get paid for bringing 'em in - not for keeping 'em!" Of course, we may not come out and say that, but let's face it - many of us feel that way. Well, there are several reasons why investing time in making sure your customers remain your customers is smart:

  1. Reference value: How many of your deals might not have closed - or closed in the quarter you wanted them to - if these customers weren't available and willing to put in a good word for you with a prospect who was ready to pull the trigger, but just needed that extra assurance that he was making the right decision?


  2. Referrals: An enthusiastic customer is a source of endless referrals. Do you want those referrals coming to you - or going to a competitor?


  3. Learn who's poking around: Just as you are out hunting for new business - business that is now with a competitor - so too are your competitors out there poking around your customers, looking to take them away from you. I don't know about you, but my attitude is that that customer is my
    customer, and I'll be damned if I'm going to let someone else take him away from me.


  4. Upsell possibilities:Changes occuring inyour customer's organization could mean opportunities for deeper penetration.


And for you managers, all these reasons plus one more very important one apply: you are responsible for profit, not just sales. In addition to losing the revenue from this account, someone has to spend time replacing that account, in addition to adding to the account base you started with. And the cost of acquiring that new account is, as we know, many times more than the revenue that lost account had been generating. If you're not motivating your reps sufficiently enough (i.e., being stingy with renewal commissions or bonuses), you may be inadvertently contributing to the problem of customer attrition.


ACTION ITEM

If you're a sales rep, carve 45 minutes of your day - today. Schedule specific points throughout the calendar to "touch" each of your customers - a stop- by meeting, a phone call, faxing an article of interest - whatever fits your style, territory, and circumstance. Then pick up the phone and call a half dozen of your accounts. Big ones, small ones - it doesn't matter. Find out how your product or service is working for them. Share with them something you feel might be useful for them to know - whether or not it has anything to do with your company or product. The mere act of doing this keeps you present in your customer's mind - and it needn't - it shouldn't - take a lot of time. At the same time, you're also subtly communicating to the customer that you continue to have their best interests at heart even long after you've "closed" the sale (think that won't go a long way to fending off the competition?). And by talking with or visiting with your customers, you might find out about an opportunity to sell more product, about a competitor who's trying to unseat you, or a gripe that's simmering that just might cause him to go to that competitor.

If you're a manager, review whether and how you're compensation plan provides an incentive for your reps to allocate time to customer retention, and make the necessary adjustments. Consider not only compensating for retained business, but any referral business that results directly from that account's being retained. Publicly acknowledge those reps who excel at preventing their competitors from stealing their customers away.

With just a little effort, managers and reps can ensure continued revenue from the existing account base, and growth from new business. You just have to have a plan, and execute it.

Good Selling!




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