Strategic Relations Journal


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Issue #71 -- February 10, 2003


Ways to Improve Customer Retention

Right now, I am heavy into business development work for a client of mine, talk about a challenge. It seems like everyone has cut their budgets to the bone, but we are making progress. How are your relationship tasks coming along?

The lesson I bring to you today looks at the three key areas where you can improve customer retention in a difficult market. In "9 Ways to Improve Customer Retention in a Tight Marketplace," you will learn strategies to improving sales flow, focusing your best customers, and enhancing your ability to serve their needs. If budgets are tight in your industry, then these strategies can keep customers sending money your way.

Last week I shared with you management strategies to reduce costs, what results are you seeing. Drop me a quick note sometime; I would be interested in hearing about your success. Next week I share with you tips on leveraging partnerships to improve sales.

If there is anything I can do for you, please let me know.

Respectfully submitted,

Justin Hitt
Strategic Relations Consultant, Author & Speaker
https://iunctura.com/


9 Ways to Improve Customer Retention in a Tight Marketplace

By Justin Hitt, Strategic Relations Consultant, https://iunctura.com/

When a cloud of economic slowdown looks over your business or industry, what are you prepared to do to retain customers? Less informed executives often hold tight for a wild ride without taking any clear action, when there is something you can do. You can improve customer retention in a tight economy by improving sale flow, focusing on your best customers, and enhancing your ability to serve their needs.

Here are a series of strategies you can put into action today:

  1. Reconnect with every past customer and current account. Make sure you are serving each customers needs, as well as adequately address new desires. Demonstrate you really understand their business by bringing specific solutions to the table.
  2. Get deeper entrenched with the buyers you already have. This does not mean lock them in with proprietary product, but become indispensable to them through value. Be familiar with multiple decision makers at each customer location, this helps keep the account open even if key players change jobs.
  3. Reduce what you do before discounting your price. Many companies are tempted to make a sale at any cost. Have a clear plan for profits on every transaction, if you have to discount prices, reduce the amount of services you provide.
  4. Be selective about the customers who get an investment of your time. Focus on your most profitable customers by volume, frequency, and ability to pay. If this means losing a few deadbeat accounts to allow time to spend with key customers then by all means.
  5. Help customers buy more from you. Know the total spent in each area of products you provide, compare this with what they buy from you. Often you will find they spend only a small percentage of what they could with your business, give them a good reason to buy more from you.
  6. Have a clear understanding of your customers' current wants. Know exactly what they need now. In a tight marketplace, they could have different priorities than at other times. Orient your focus to solving problems to which they have an immediate need.
  7. Improve job skills of those closest to the money. Utilize internal or low cost training to increase individual proficiency as it improves the customers experience or your company's ability to produce income. Start with customer service skills, and then work up through "how" to improve individual job performance. Not only will this help you keep customers, but you increase your company's overall value.
  8. Work with strategic partners to improve your value to the customer. Improve your customer relationship by bringing high quality providers to your customers, as they would help reduce costs, or improve the customer performance with your product. Introduce specialized skills with specific solutions.
  9. Accelerate the collection of accounts receivable. Your business will need more cash to serve existing customers, and it does not matter how much income you produce if you are not collecting it. Do more cash business, and look for ways to be paid faster.

During tight markets, customers are going to be concerned about price, enticing offers from your competition, and will judge your business by its perceived stability. It is critical you stand strong and stay in front of customers by solving real problems. You will retain accounts when you are proactive instead of reactionary in light of the economic landscape.

Often your customers are just as concerned as you are about a tight marketplace. The best test of your relationship with them is adversity, and how you handle it. Improving sales flow, focusing on your best customers, and enhancing your ability to serve customers needs demonstrates strength. How will you use that strength to retain (and grow) your customers?

© 2003 Justin Hitt, All rights reserved.
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Justin Hitt is a strategic relations consultant and the author of "How to Get more Profits by Cultivating Your Best Customers". Clients include business owners and executives of medium to large companies worldwide. He can be reached at https://iunctura.com/

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Featuring

>> Big "thank you"to those who faxed in their business card for a complementary copy of "How to Cultivate Your 'Top Ten Percent' Customers for Greater Profits" If you missed out, well, better luck next time. The early bird saves $47 dollars.

>> Quick Survey: What is the biggest relationship challenge you face as an executive or manager in business? Reply to this message with your answer, and I will post a summary of results here next week. Help fellow readers, all responses are confidential.

>> Do you have an opinion on effective ways to listen to employees? A good friend Bob Abbott is putting together a magazine article on the executive listening skills, and needs feedback from real executive on the front line. Mail your tips and opinions to mailto:abbottr@managersguide.com


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