Big Picture - March 2015 - (Page 16)

business + management Preserving Customer Loyalty How you can keep current clients coming back for more. | by Marty McGhie B BIG PICTURE March 2015 uilding a successful client base is one of the most critical challenges we face in business. And while landing new customers is always going to be an important part of your business, retaining your current customers is even more crucial to your ongoing success. Unfortunately, sometimes we focus so much on earning new business that we forget to take care of our existing business. How can you ensure that you are providing the necessary service to your existing clients so they remain your customers for a very long time? You've probably heard many times how much more difficult and expensive it is to acquire a new customer than to retain a current one. A survey by the Chartered Institute of Marketing indicates that it is between five and 10 times more expensive to secure a new client than to keep an existing one. Whether it's five or 10 times doesn't really matter. We can all agree that replacing the revenue from a top customer is extremely difficult and very expensive. My point is that your business cannot afford to lose any of your valuable customers to a competitor. Notice that I have qualified those customers you must protect as your "valuable customers." But what makes a valuable customer? Does it have to do with the amount of revenue generated annually by a given customer? This is, of course, one of the most important factors. If you're a typical business in our industry, your top 25 customers will account for a significant portion of your annual revenue and you likely only have to go about 40 to 50 deep in your customer base to account for the large majority of your yearly sales. Assuming this is the case, your ability to care for your customer base now becomes a little more manageable. These are the customers to focus on. Your top customers are the lifeblood of your business. Caring for these customers must be in the forefront of your mind in any decision you make in your business, whether it's sales, marketing, production, asset acquisitions, logistics, management, or even changing your phone system. Always ask yourself, "How will this decision affect my top customers?" RELATIONSHIP GOALS So, how do you take care of them? First, try to create a relationship with your top customers that's more of a partnership than a vendor-customer relationship. Your sales reps should be communicating with them on a regular basis, and should be viewed as valued consultants offering ongoing solutions to their challenges rather than mere "order takers." Frankly, in our own organization, we have some sales reps who are, in fact, viewed as consultants or partners by our customers, and we have some sales reps that serve as basic order takers to our clients. You can imagine which of those sales reps are the most successful and end up managing our large customers. But these successful relationships are not fostered by the sales reps alone. Your commitments to your customers are only as good as the execution from your operations. A sales rep's promise to take care of a customer's problem only works if your company stands behind it and takes care of the problem. This MARTY MCGHIE is VP finance/operations of Ferrari Color, a digitalimaging center in Salt Lake City, San Francisco, and Sacramento. He is a partner and director of Signs.com. marty@ferraricolor.com 16 http://www.Signs.com

Table of Contents for the Digital Edition of Big Picture - March 2015

Big Picture - March 2015
Contents
Insight
Wide Angle
Upfront
Inside Output
Business & Management
Make It Pop
Internet of Places: ISA Preview
Behind the Silver Screen
R+D
Job Log

Big Picture - March 2015

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