by Andy
September 22, 2009
It’s the first rule of new business and the #1 priority to any company. The problem is that it’s hard to focus on client retention and acquisition at the same time. That’s why most firms (especially in the service sector) engage a full-time new business person (or team) whose sole focus is opening new doors. Customer retention then falls on everyone else to deliver outstanding products, pricing, and service – not to mention well-timed problem interventions and schmoozing. Assuming this occurs, existing customers should not only stay, they should grow their business relationship with you.
This process works quite well, especially when corporate leadership remains consistent over very long periods of time. Customer relationships become secure and occasional miscues get swept under a rug of built-up goodwill.
Uh-oh.
Corporate leadership is turning over fast. According to Bob Van Rossum, (President of MarketPro – an Atlanta-based recruiting firm), “the average CMO only lasts 18 months.” For those of us in marketing, we all know the effects. Existing relationships are questioned or terminated while new ones are established (at least for the next 18 months). And the other C-Suite titles are turning over faster too, though not at the same sacrificial rate as CMOs.
The problem is that change in leadership often creates unnecessary customer concern. Who are these new people? What’s going on over there? How will this affect my company? Should I consider a change in business relationship? YIKES!
Let’s go back to the first rule of new business – keep the business you got. This should also the first rule of marketing – particularly in the B2B space where there are far fewer prospects to replace them with. Yet, customer retention is not high on marketing’s priority list. Capturing future success first requires securing the present.
Doing a great job for them everyday is certainly a pre-requisite, it’s often not enough. That’s because many times, those doing the work are not the ones making the decisions. To overcome this, you need to matter beyond the team you’re performing for. You need to be seen as a leader in your space. Leverage speaking opportunities at key trades shows. Develop a current and well-managed online strategy beyond your website. Develop a client advisory board and get their input on your marketing initiatives.
The more you control customer dialogue beyond leadership’s savvy schmooze, the more you improve retention rates should they depart. It not only helps you keep what you got, it greatly helps you get more of it.
This is a great point. Our company had definitely been having an issue with “win some lose some” customer gains, until in the past two years one of our marketing/sales officers’ role has evolved into actively seeking new business and clients, while the other two have been more of an account management position, and as a result we have seen our new business spike, we have lost far less existing business than in the past and have seen a large degree of growth with our exisitng customers.
Every company struggles with relevancy. The issue is that the world keeps changing. Xerox is now managing the airport parking payment system in Atlanta (with its purchase of ACS). How can customers keep a brands relevancy to their life straight?
Customer centricity is critical at every decision point. Understanding who your customers are and why they buy your product are a beginning. Taking the consistent, relevant action necessary to keep your customers at the center of your organization is what insures you “keep what you got”.
One challenge I face is balancing the need to adapt to evolving conditions (change) against the need to consistently deliver a reliable/predictable service (don’t change). Clients (current and prospective) change. Their needs change. Providers must adapt to meet those needs while remaining committed to the elements that initially attracted and kept customers. It’s a difficult balance to maintain.
Leadership turnover can certainly contribute to destabilizing existing customer relationships. Customers, being only human, like to operate in a comfort zone. Establishing an ongoing relevancy dialogue with existing customers can innoculate customers against some of this discomfort in turbulent times. The notion of a client advisory board for marketing initiatives also resonates very well.