Written by Sean McPheat |
Opinions differ as to how much it actually costs to gain a new customer to your business. The stock answer, of course, is ‘a lot’. And you’d be right. So now more than ever it makes sense to keep your existing customer base close and invest in expanding business with customers who are already buying from you.
Let me ask you a question that not many salespeople are able to answer positively; how long has it been since you took a serious look at why your current customers are loyal to you, your products and your company?
Let me follow up with some others: what specifically are your customers looking for from your services? Have you been taking their business for granted? Have you earned that loyalty over a period of time?
Here are some more questions that will identify if your current base is at risk:
* How critical are your products and services to the way your customer does business?
* How interconnected are your products to the customer’s processes and procedures?
* How important is price to your customer in the long-term realtionship with you?
* Is how you do business with the customer as important as why they do business with you?
* How valuable to their everyday business are your services and products?
* Could they get similar products from your competition and not miss out too much in the back-up, delivery and follow-up you offer?
Your answers to these questions will identify how high the ‘switching costs’ will be for the customers you currently count as loyal.
Those costs of switching will include the benefits they will lose by dropping you as a supplier, as well as the actual monetary value of losing the profits you can bring them. If you are able to prove to them that the value of doing business with you outweighs the benefits they will find elsewhere, you have a great iopportunity of maintaining the business and keeping them loyal to you.
A high attrition rate among your current customer base should make alarm bells ring and make you work on the most cost-effective way of building profits in today’s selling environment…keeping current customers loyal.
Originally published: 28 April, 2011
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