The success of a business or a sales career depends on your ability to get customers, and then hold on to them over the long haul. In today's competitive market, a good customer base is very difficult and expensive to cultivate, but it represents tremendous value to an organization. In fact, a list of satisfied customers can be the single-most valuable asset a company can acquire during its lifetime. Your job--no matter where you are in the private sector--is to help your company attract, acquire and keep customers indefinitely. They are the difference between success and failure.
In this segment, I'm going to talk about some of the things that are done by the very best salespeople and organizations in America to build and maintain large, profitable, successful enterprises.
"What is the purpose of a business?"
The purpose of a business is to create and keep a customer. If a business is successful in this area it will make a profit and will continue to thrive. If, for any reason, a business fails to attract a sufficient number of customers, or to serve them in a cost-effective way, it will experience losses. Too few sales or too many losses will lead to the demise of the enterprise. Large sales volume accompanied by profitability leads to the growth of the business.
According to Dun and Bradstreet, the single-most important reason for the failure of businesses in America is lack of sales. And, of course, this refers to resales as well as initial sales.
You should practice the Pareto Principle in all of your activities. If your company's job is to create and keep a customer, your job is exactly the same. Your sales success depends on you creating and keeping customers as well. By using the Pareto Principle--the 80/20 Rule--you should spend 80 percent of your working day creating customers and 20 percent of your working day keeping customers. Do not make the mistake that many salespeople make of spending 80 percent of their time with past customers and only 20 percent of their time in new business development.
Within the context of creating and keeping customers, what, then, is the job of the salesperson? The answer to this is simple. The job of the salesperson is to prospect, present and follow-up. Your sales success will be directly proportional to the quality and quantity of work that you do in these three areas.
Again, you should apply the Pareto Principle to this work. You should spend 80 percent of your time prospecting and presenting, and 20 percent of your time following up. Your future depends on the business of tomorrow, not the sales activities of the past. You should always be asking yourself where your next sale is coming from.
The most important words in developing a successful customer base are Positioning and Differentiation.
The reason for a company's success is usually contained in what is called its Competitive Advantage. This is the advantage it has over its competitors in the same marketplace. Competitive advantage refers to the unique and special benefits that your product or service offers that no other product or service in the same category can give your customer.
Your competitive advantage is also referred to as your Area of Excellence. This is the unique or special thing that your product or service does in an excellent way. You need to think carefully about your product's area of excellence and put it in the forefront of all your selling efforts. And, as Jack Welch, the CEO of General Electric, says, "If you don't have a competitive advantage, don't compete!"
Sometimes this competitive advantage is called your Unique Selling Proposition. It may be a single point or it may be several points. A unique selling proposition is something that applies only to your product or service. No other product or service has it. It is the reason your product or service is offered in the first place. It is something special that justifies the production, distribution and sale of your product or service in a competitive market. Your job is to find it and then to focus all of your selling efforts on it. Your area of uniqueness, your competitive advantage or area of excellence, is the reason people buy your product or service in preference to anything else being offered.
When you begin to think about acquiring and keeping customers for life, you need to think about the particular types of customers for whom your competitive advantage is so important that they would be poorly served by using anyone else's product. You need to then emphasize and re-emphasize that the special features and benefits that you offer are so important that they should not even think of going somewhere else. If, for any reason, you fail to do this, you may lose the customer and all the work you've done in building that customer relationship in the first place.
There are three keys to keeping customers for life. They are all combined and somewhat similar. They are relationship selling, partnering for profit, and consultative selling. They are all ways to differentiate yourself from anyone else who is attempting to sell the same product or service. They are all ways to keep customers--once you have them--and sell to them again and again over the years. I will explain each of these in detail.
Relationship Selling is the core of modern selling strategies. It is the key to your long-term success. Relationship selling requires a clear understanding of the dynamics of the selling process as they are experienced by your customer.
Relationship selling comes into play whenever your customer needs to rely on your advice and support to get the full benefit of what he buys. Most sales today are complex sales. That is, they are multi-call sales, requiring several calls to the customer or several visits to his place of business before the customer is in a position to make an intelligent buying decision. A product or service. It comes first. It must be established clearly before you can go on. It is, in fact, the key differentiation between you and your competitors. In many cases, the quality of your relationship with the customer is the competitive advantage that enables you to edge out others who may have products and services similar to yours or are selling at lower prices.
The single biggest mistake that causes salespeople and companies to lose customers is taking the customer for granted. This is a form of "customer entropy." It is when the salesperson relaxes his efforts and begins to ignore the customer. Almost 70 percent of customers who walked away from their existing suppliers later replied that the primary reason they changed was due to a lack of attention from the company.
Once you have invested the time and made the efforts necessary to build a high-quality, trust-based relationship with your customer, you must maintain that relationship for the life of your business. You must never take it for granted.
The second key to keeping customers for life is the Partnering Approach to business sales. When you deal with a businessperson, you can be sure of one thing: that person thinks about his business day and night. It is very close to him. It is dear to his heart.
You should always be looking to help and advise your customer on ways to cut costs and improve results in his or her area of responsibility. You should look for ways to help your customer in non-business areas as well. You should position yourself as one who cares about the success of your customer more than anyone else, and even more than you care about selling your product or service. This approach to partnering in profit with your customer is a key way to differentiate yourself and to keep your customer for the indefinite future.
There is a principle of reciprocity in business that is extremely powerful. It simply says that, "If you do something nice for someone else, they will feel obligated to do something nice for you." You should be looking for opportunities to go the extra mile, to do more than you are paid for, to put in more than you take out. By extending yourself, you improve your positioning in the customer's mind and increasingly differentiate yourself and your company from those of your competitors who are after the same business.
The third key to keeping customers for life is the Consulting Approach to your dealings with your customer, or what is called consultative selling. When you position yourself as a consultant, you are really positioning yourself to serve your customer as a problem solver. Instead of trying to sell something to your customer, you concentrate all of your efforts and attention on helping your customer solve his problems, achieve his goals, or satisfy his needs.
Many salespeople and companies today make the mistake of thinking the reason people buy is primarily on the basis of price. This is simply untrue. Fully 94 percent of all sales in America are non-price sales. When customers are asked after sales interviews what it was that caused them to buy from a particular salesperson or company, the reasons they give are invariably: the reputation of the company, the level of service and support that the company offers, the reliability of the company and the salesperson, the responsiveness of the organization to their complaints and requests, the speed with which the company reacts to their needs, and the quality of the individual salesperson with whom they have been dealing. Price invariably ranks at number seven or eight, if it comes up at all in the surveys.
The key to keeping customers for life is satisfaction. Total quality management has been defined as, "Finding out what the customer wants, and then giving it to him." There is no mystery to it. The reason companies lose customers is because they have failed to identify exactly why it is that customers buy in the first place. Then, they have failed to continue giving to the customer for the duration of their relationship.
A customer can be the most valuable single asset that a company has. Giving committed service to your customers--in such a way that you keep them for life--is one of the smartest and most profitable things that you could ever do. When you do this, your future in selling and your future in business is assured.
