Think about how you respond when you close a big sale. Do you consider it the beginning of a great new relationship or do you immediately run off to close your next deal? Julie Thomas, president and CEO of ValueSelling Associates, says that too many sales professionals interact with customers when they close the deal and then revisit them a year later to renew the contract. To keep your customers loyal, you must be truly invested in your customers' success.
In this issue of Promotional Consultant Today, we discuss Thomas' best ways to retain customers and prepare for renewals.
1. Approach renewals with care. Most companies commit enormous amounts of resources and effort to win new clients, yet when it comes to retaining customers, companies do not apply the same amount of time, energy and thoughtfulness. Research shows that 44 percent of companies have a greater focus on acquiring customers, while only 18 percent focus on retaining customers. In order to avoid customer acquisition costs, many businesses follow the golden rule of retaining customers and building a loyal relationship with them. Consider these statistics on the value of keeping customers:
- It costs five times as much to attract a new customer as it does to keep an existing one
- The probability of selling to an existing customer is 60-70 percent, while the probability of selling to a new prospect is five-20 percent
- Increasing customer retention rates by five percent increases profits by 25-95 percent
2. Create a frictionless customer experience. Selling today is a team activity that happens across several departments, says Thomas. A customer's impression of a company is shaped by multiple touchpoints with employees across the business. That's why it's essential for companies to use a sales methodology that all customer-facing employees can easily understand and use consistently. Make sure every department that interacts with the customer after the sale speaks the same language and is part of providing a holistic experience.
3. Conduct a health check. The ability to renew a contract depends on the salesperson's ability to build a relationship with the customer. Performing health checks with customers is a great way to check in and see how things are going without selling them anything, says Thomas. You came to know each other during the initial sales cycle, so now you have an opportunity to strengthen the relationship. Gain rapport with your customers by being yourself and getting to know them.
4. Set reminders ahead of the renewal date. Thomas says that the average global 1000 corporation has more than 40,000 active contracts at any given time. If your company sells ongoing services, salespeople can set reminders to renew the annual contract well ahead of the actual renewal date, typically at least 60 days in advance. This will give you plenty of time to work through negotiations and approvals before the contract expires.
5. Perform continuous engagement for requalification. If your business solves a specific problem (rather than a continual service), you must realize that once that need is met, it's not a motivator for the next sales cycle. Staying partnered with your customers enables you to discover what problems the customer may have now and what their new needs are, according to Thomas.
Your success as a sales professional is contingent upon the success of your customers. When you focus on adding value and not just making a sale, you can establish a lasting relationship that benefits both parties.
Compiled by Audrey Sellers
Source: Julie Thomas is president and CEO of ValueSelling Associates. She is a noted speaker, author and consultant with more than 24 years of experience in sales.
Used with Permission from PPAI and PCT.