Customer Retention - 

The Key to Business Success

The impact of losing customers is enormous, and many businesses don’t really understand how important this is. Consider this – The typical business will lose one half of its customers within 5 years. Thus, if you have 1000 customers today, you can kiss half of them goodbye in 5 years when you’ll only have 500 customers left. Now, of course you wouldn’t just sit idle and watch your customers vanish. You will acquire new customers, which will replace the ones who have left or are leaving, thereby balancing everything out. In fact, if you grow like many businesses, then you should end up with more than 1000 customers after 5 years. Right? Well, yes and no.

While you may replace the departing customers, it will be at a very high price. The cost to find and acquire a new customer is seven to ten times higher than to retain and sell to an existing one. Quite simply this means that by the time you found a new prospect, marketed to them, and sold them something, it would cost you a fraction, up to one tenth, to sell to your existing customers instead. But what would you sell to your existing customers? How about more of what they purchased before, or upgrades, new versions, services, maintenance agreements, add-on products, and much, much more?

If it costs so much more to acquire new customers, why don’t more businesses focus on retaining their existing customers? Good question. A small increase in your customer retention could result in a dramatic increase in your profits. But why don’t more businesses practice this? Too many businesses are interested only in acquiring new customers at the risk of ignoring their bread-and-butter customer base. While acquiring new customers is important in any business, it cannot occur at the sacrifice of the existing customer base. What tends to frequently occur in many businesses today is the opposite of customer retention. Instead of doing everything reasonable to retain existing customers, businesses tend to alienate their customers by making it difficult to work with them or by providing poor customer service. A dissatisfied customer can be the death of a business. Up to 90% of dissatisfied customers will not buy from you again. 

What do you think your customers do when they are unhappy with your product or service? They shop somewhere else. To make matters worse, a dissatisfied customer will tell up to 9 other people about their unpleasant experience with your business. This is similar to the parable: “Good news travels fast. Bad news travels at the speed of light.” On top of this, around 95% of dissatisfied customers do not tell their story to you. Of course not, they are too busy telling 9 other friends.

What is a business to do? It is not enough to say you will provide better service, although that is very important to do regardless. A change of focus is necessary - A focus away from internal issues such as revenue and cost reduction, and a focus toward the customer. Simply stated, if you take good care of your customer, the revenue will follow.

To read more about Customer Retention, download our FREE White Paper entitled, "Customer Retention - The Key to Business Success" by clicking here.

Automating Your Sales Processes 

& CRM Strategies

There's a lot of talk about using technology to automate your sales force and to help your business strategy for managing your customer relationships, or what is commonly known as Customer Relationship Management, or CRM. No doubt, technology can help any business become more efficient and effective. Purchasing technology alone will not, however, improve sales performance. It will only allow a poor sales rep to accomplish poor habits more quickly. Sales reps sell either by “Process” or by “Accident”. An accident happens when a sale comes along that is basically a surprise and wasn’t expected. A Sales Process, on the other hand, is a step-by-step procedure that is executed for each potential customer (prospect) in order to get her into a position to want to purchase your product or service from you.

Since accidents don’t happen often enough, we have to rely on processes to be successful. Therefore, a Sales Process needs to be defined and implemented so that each sales rep performs at their most effective level, thus increasing their success. A Sales Process defines the methodologies for which steps need to be taken, and repeated, to move the process along the sales path toward a purchase. It also includes the methods for qualifying a prospect, listening to the prospect’s needs, analyzing alternatives, and presenting the appropriate solutions so the prospect will want to purchase from you. Therefore, your should develop Sales Processes and methodologies, and provide ample Sales Training in order for your sales team to understand these new processes and methodologies, why they exist, how they will benefit them, and how to implement them.

Once you have your Sales Processes and CRM strategy defined, you can look toward technology as a tool to implement them. There are many sales automation, contact management, and CRM products available today. However, simply choosing the right product will not guarantee success. Remember that technology is used to deploy your Sales Process and CRM strategy, not drive them.

The right Sales Automation and CRM product should replicate your best sales practices. Thus, first understand what your best sales practices are. If you don’t have any best practices, or what you have is insufficient, then develop them first, then use technology to deploy and replicate them. By designing your product around your processes and successful methodologies, your weaker sales reps will become more successful. Your stronger sales reps will become more efficient. And, your new sales reps will have a reduced learning curve since they will have the pre-defined steps for success and a tool to make them more readily efficient.

Since there is a lot to consider in choosing a Sales Automation and CRM product, be sure to evaluate multiple vendors. Develop specs and provide them to the vendors to prove they can meet your criteria, now and in the future. The product you choose should grow and expand with your company and with your future plans. Thus, having a Sales Process and CRM strategy defined and documented at this stage will be critical so you know where you’ll want to be over time. An excellent product that can economically address your Sales Process requirements and help implement your CRM strategy, is GoldMine, from FrontRange Solutions. GoldMine not only handles the obvious functions such as; contact management, calendar events and scheduling, MS Word integration, and email management, but it also can run your marketing campaigns, handle your forecasting, share information with everyone in your business whether local or remote, and much more. GoldMine can, in effect, run your company's marketing and sales functions.

As with anything that is powerful and sophisticated, use specialists to help with both the planning phases and the implementation. Their experience and expertise will prove invaluable to your success and you won't end up wasting a lot of time learning what experts already know, nor wind up down the wrong path or over your head. For more information about GoldMine, Sales Process development, CRM strategies, or Sales Training, contact us at Sales@PeakSalesConsulting.com or 702-655-5652.