When you find yourself in a tough economy and your market share is under attack, what is the one thing you are hyper-focused on? Customer loyalty.
World-class companies are fanatics about loyalty, regardless of the economic cycle or their own market dynamics. But what is the definition of loyalty? More importantly, how do you measure loyalty?
When asked, most of us might say things like customer retention, stickiness, or even customer satisfaction. But what does this really mean? At the end of the day, what we are talking about is revenue per customer. That is the real measure of loyalty, isn’t it? Will they spend their hard-earned money with me again and again?
In a market with many choices and fewer dollars to go around, standing out in your customers’ minds often boils down to a lot of intangible nuances. In other words, your customers must not only like you they must love you!
It seems to me the manufacturers are really struggling with this, and it becomes even more complex when selling non-inventory items like services – especially through an independent reseller channel. Some have even suggested that their MPS programs are simply ‘straw men’ thrown out to keep some level of mindshare. My take is that they are just like the rest of us trying to figure it all out; they are happy to provide programs that incent growth and traction for channel providers, but dealers and resellers are hitting the same wall: That is, the customers are more informed, have more choices and are hanging on to their money more now than ever.
So do we just suck it up and say the economy is what it is? Do we simply adjust our expectations to our current climate? Maybe, but those that are thriving have become experts in what I’m about to tell you. These best-in-class companies understand there are six key ways to generate revenue:
- More Leads (Pipeline): Did you know that it typically takes between 7-12 “touches” to convert a suspect into a qualified prospect? Best-in-class organizations are experts at driving more leads to the front door. They may have been good at sales, but they are great at marketing to new and existing customers to increase overall opportunity.
- Higher Conversion (Relevant Messaging): What are you doing to ensure messaging is truly relevant to your audience? Being on target with your prospects and current customers is one of the most painful lessons I’ve had to learn, right after generating more leads.
- Raise Prices (Increased Value): At first, this seems like an absolute “NO”, but by raising prices you don’t have to convert as many leads and also get to spend more time with the customers you love. You’ll generally expend the same effort in the sales process, so consider how you like to present yourself.
- Higher Frequency of Sales per Lead: This really goes well with the “blue ocean” strategy. The more lines of business you have, the more opportunities you have to generate additional revenues with the same customer.
- Increased Frequency of Sales: This method is the one most of us gravitates towards. But we are often faced with the real world issues surrounding the actual execution. Finding a way to shorten your sales cycle or increase actual sales is generally accomplished in one of two ways: Increasing the number of sales staff or dramatically improving your ability to touch customers’ pain point. My experience has taught me either method can be rather expensive.
- Selling Partner Products: One key area most of us miss is the ability to gain affiliate fees from partners. You may not have a core expertise yourself, but if you hold a trusted advisors role with your customers they’ll look to you to refer key goods and services. A great partnering strategy is often a great reinforcement to overall loyalty.
What’s critical to understand is that world-class companies have installed processes to effectively target each one of these key six drivers. They are relentless in their pursuit of customers, but also in their ability to generate additional revenues across their entire portfolio.
Your customers have problems just like you and I do, but we can become so focused on our own day-to-day issues that we may actually miss helping them solve them. Increased loyalty really comes at the cost of listening well, and delivering what solves our customers’ problems. In other words, if you show your customers how to put money back in their own pockets they’ll be forever grateful. This tends to translate into the best revenue generator of all, and results in extremely loyal customers.