Tuesday, August 26, 2003
Are you struggling to create and keep profitable customers? Columns for Sales and Marketing Management who wants to build business relationships.
You already know how to do what will bring more profits to your business. Regular readers will notice the perpetual theme of cultivating customer relationships and high-skilled employees.
(Continue ... Go back to basics for marketing ROI)
Latin Proverb. "If the wind will not serve, take to the oars." [Motivational Quotes of the Day]
Ideally you want profitable customers pounding down your door, demanding your products and services to the point you can't delivery anymore. Customers so loyal that they ignore small mistakes and work with you on bigger ones. Imagine how much revenue you could generate if you had even a handful of customers like this.
Of course, you actually do-- these customers represent your most profitable customers to whom you have built a relationship with over time. These customers will accept you as you are, but most often don't represent a large enough segment of your customer base to sustain your business.
So when these customers aren't knocking on your door, you need to find them. This profitable customers won't always be buying, often you'll also need to seek out customers like them outside your current base. Here are a number of ideas for seeking out new high-value profitable customers:
- Ask existing customers for qualified referrals. Use specific questions to identify profitable customers inside your customers sphere of influence. These questions are developed by your sales qualification funnel and are designed to help your customers identify people they know who will most likely become buyers.
- Harvest your strategic partners customer base. Swap mailing lists with your strategic partners, do co-op mailings, or joint promotions that leverage the credibility of partner relationships. This could include endorsements or even product bundles depending on what you offer the customer.
- Visit the places suspect for customers who fit your profitable criteria. The key is to reach those who are likely to have the same characteristics of your profitable customers but have never heard of you. Unless you have a 100% market share, there are some customers that haven't heard of you yet. Use trade publications, educational events, and work the trade shows.
- Add more selling channels based on past experience in other industries. Computer hardware had success with distributors and resellers who integrated components, would the same work for your manufacturing equipment. Borrow ideas from other industries to introduce more ways to sell your product to end-users.
- Bundle commonly used services even if you aren't the primary provider. Add value to what you do by inviting service partners to integrate your product or enhance your services. Focus on those things that significantly improve the customers return on investment. Give the customer choices based on their individual desires.
- Use qualification tools to get more customers to raise there hand. Turn your website and marketing materials into qualification tools that get prospects to tell you what they want. Improve the quality of your market research and reach out to as many prospects as possible with lower cost marketing tools.
Justin Hitt helps executive build stronger relationships that can increase profits and create loyal customers. For more information visit Inside Strategic Relations or call +1 (877) 207-3798
'Big Bang' Works Best. Trying to improve your supply chain operations? A new study says bold action yields a bigger ROI than incrementalism. [Computerworld CRM News]
While bold actions can yield larger returns, there are several issues to consider when reading about Booz-Allen Hamilton's results:
- HP and Compaq were already involved in major changes. Bold actions to improving the supply chain have less resistance when rolled into larger issues. Consider how these actions may have been received if the supply chain improvements were the end-users only experience. Often it's easier to bundle many changes in a large inevitable change, than many little changes.
- Bold change works better when you have full team buy-in (or other conditions make it necessary.) Often this can be achieved by involving end-users early in the design and vision of the supply chain improvements. Focus on simplifying their job, reducing costs, and improving the customers experience.
- Large changes sweeping across a number of areas in the company are more accepted because one group isn't the only one to experience discomfort. The shared experience helps individuals cope with the new way of doing things, and there are fewer opportunities to deny the change. After initial testing roll out big when possible so you don't have users straddled across two ways of doing things.
- Frequently when companies use incremental improvement they take steps that are too small. When improving anything you must gradually build on your successes, taking bigger steps as initial tests pay off. If you make a mistake, then return to the last point of success. Think of the baby that learns to crawl, then walk, and eventually runs-- it gets nowhere crawling all its life.
- Big bold changes are easier to make into rallying points, but can create greater failures. Your big change should be well thought out, if you jump in the wrong direction you could waste a lot of effort on something with very little chance of success. With big risks come greater returns, but also a high chance of failure.
- Timing is extremely important to your success. Revamping your supply chain in the middle of a high demand boom will probably sink your business and send your customers packing. Bold actions are more likely to be successful when you can dedicate the proper resources to them.
Justin Hitt teaches executives how to create strong business relationships that can increase profits while improving customer loyalty. To learn more about business relationships visit Inside Strategic Relations or call +1 (877) 207-3798
Your organizations fixed costs are one things you can control in your business. Often managers are overly concerned with cost reductions and remove the wrong things. These wrong things include:
- Employee skill training directly related to current role. Training is not optional, in technology industries individuals must be constantly trained in their area of expertise or they will fall behind. Even more importantly, soft skills training rounds an employees value to an organization.
- Reducing human involvement in sales process. Automated phone systems remove customers from costly human interaction, but often just cause additional irritation. Automation is valuable in some areas, but let the customer get to a person if that is what they desire. What has it cost you to remove the flexibility people provide?
- Support staff that free the time of key contributors to core objective. Today's managers are doing their own typing, even getting their own coffee, and scheduling their own travel. How much time does this take away from actual management?
- Adjusting career paths to reduce base salaries. In the past younger employees were matched with more senior staff in an apprentice type role that conveyed key knowledge about specific jobs. By reducing this duplication payrolls are reduced, however, what have we lost in our knowledge management.
- Outsourcing knowledge workers to lower cost labor forces. A company can reduce it's payroll by 1/5th by outsourcing high-salary knowledge workers to those of equal quality in another nation. However, what is this doing to labor relations and your companies long-term ability to get high-quality staff.
Justin Hitt, with over 10 years of experience in business to business executive relationships and strategic business intelligence; has reduced costs and improve customer loyalty for professional services and numerous other technology companies. Call +1 (877) 207-3798 or visit his website at https://iunctura.com/
Last update: 04/08/2004; 2:34:39 PM.