The Art of Keeping Customers: How to Plug the Holes in a Leaky Bucket
Salespeople are hunters. We go after the big opportunity and land the sale. Sure, this hard work yields success, but winning new business is only one part of the equation. What are you doing to retain your customers after the initial sale is made? Does your organization have a “leaky bucket” model?
By this, I mean that you can’t sell your way to growth if you are losing your base. If you are losing 30% of your customers each year, while at the same time trying to grow by 20%, you will actually need to grow by 50% to meet that goal. Your bucket is leaky – it just doesn’t scale.
Approach Renewals with the Same Rigor as Selling New Clients
Most companies dedicate a tremendous amount of rigor to the sales processes for winning new clients, yet when it comes to renewing, they don’t apply the same amount of rigor. Research by invesp backs this up, reporting that 44% of companies say they put most of their focus on customer acquisition, while only 18% put a greater focus on customer retention.
After the sale is made, what can you do to retain your customers? We need to create a frictionless experience for the customer to ensure retention. The handoff between direct sales, inside sales, and customer service should be seamless. This should be an opportunity to hand off the Value Prompter and the mutual plan to the customer service team. However, in too many companies, salespeople make promises to prospects, but once the prospect becomes a customer, things change. Miscommunication and unfulfilled promises lead to dissatisfied customers, and the opportunity for a long-term customer relationship is lost.
Here’s why it’s essential to realize the value of keeping customers: (See the infographic from invesp.)
- It costs 5 times as much to attract a new customer, than to keep an existing one
- The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%
- Increasing customer retention rates by 5% increases profits by 25% to 95%
Customer retention makes a huge impact on both top-line revenues and bottom-line profits. Because keeping customers doesn’t get the focus it deserves, we sometimes forget this.
Just Because They Aren’t Complaining, Doesn’t Mean There Aren’t Issues
It’s critical to continually monitor existing customers and see what’s changed, and if there are new challenges or problems. The likelihood that everything remains the same with your customers is slim to none. Too many reps make the mistake of assuming everything is fine because they aren’t hearing complaints.
This makes me think of the kid who disappears under the dining room table when he doesn’t want to confront an issue or a puppy who hides after he chews your new shoes. It’s easier to avoid addressing a potential problem, but it must be done. Communication builds relationships – and when solid relationships are in place, people are a lot more forgiving.
A number of our clients sell continuous services that need to be renewed each year, like Software-as-a-Service (SaaS). Especially with these types of services, the rep needs to be on top of the relationship and check in to ensure any problems are handled before they escalate. It’s great when things are perfect, but in today’s world, nothing is ever perfect. So, you need to maintain the relationship, keep the lines of communication open, be empathetic, and stay in touch.
I call sales reps that never follow-up the “hit and run” reps. Sure, you may score a big win, but you can’t just run off to your next deal. To retain customers, you need to be available, be a problem solver, and act as a “go to” person for others in the organization. The best sales reps are truly invested in their customers’ success – it’s key to maintaining the relationship post-sale.
Practice Continuous Engagement for Requalification
If your business is designed to solve a specific problem (rather than an ongoing service), you must realize that once that need is met or satisfied, it is not likely a motivator the second time around. This is why you need to continue to do the work – find out what are the new needs, and what are the problems the customer may have now.
We call this continuous engagement, and it’s necessary because things change all the time. At ValueSelling Associates, we train salespeople and other client-facing employees to focus on value realization. If the focus is realizing value, rather than just making the sale, you will stay partnered with your customers in order to anticipate and fill their future needs.
Sell with Value!
Relevant topic? Listen to the recorded webinar, originally aired on September 11th at 10 AM Pacific: Digital Sales Transformation: Selling the Way Modern Buyers Want to Purchase.