6/3/2008
Leverage Your Relationships
Why businesses should focus on their best customers during an economic slump
By Charlie Fewell
When the economy is in the doldrums, as it is now, it is imperative that you focus your attention on your best customers. I know this seems odd. You’re thinking: surely now more than ever I need to find new customers and get my cash flow ticking over. Your analysis would not be wrong, it just misses out on a critical factor: roughly 20 percent of our customer list provides 80 percent of our sales revenue. Those people in that 20 percent are your best customers. And you have the capacity to attract even more business from them.
Times are tough, right? So buying patterns change and consumers close ranks a little. They stick to the businesses they trust and know. And who do you think that 20 percent knows and trusts? But the business won’t just flow to you, although you are uniquely well positioned to capitalize. You need to be at the top of their minds when they decide to purchase.
By devising a plan to stay “top of mind” with these top customers, you can become the first thought in their heads when they look to make a purchase. So how do you contact them, and how often? Strategies may vary from business to business but the message should be roughly the same: connect the dots between your range of products and services and their current or future requirements. Slow the selling process down and concentrate on understanding your customer needs. Sounds simple, doesn’t it?
Well it is simple, in theory. But you would be surprised by how many people in business allow the customer to buy according to their present requirement and leave it at that. You need to think about how you can make your customers aware of the additional products and services you have in your range. This is about reminding your top customers that you are there for them. It’s about cementing the relationship and maintaining channels of communication. Produce a newsletter, initiate an exclusive best-customer referral incentive, or throw a customer appreciation event. Your customers need to know that you are there for them and they can trust you as an honest broker, especially when their belt is tightened a little.
Let me emphasize that if you don’t have the processes in place to deliver excellent customer service and create advocates for your business from your current customer database, then there is no need to attempt to ask for more business from them or to ask for referrals. So a pre-requisite for this strategy is to ensure that you are delivering the highest quality of customer service and that your products and services live up to their billing.
When times are tough, we sometimes pre-qualify that all our customers are pulling back, waiting for things to improve, not interested, or don’t have the money now. Thinking in this way causes us to become paralyzed. So if you are convinced that customers aren’t going to buy, change your thinking to: “how can I help educate my customers now so when they are ready to buy they can make a more informed decision?”
The concept is simple: even during the bleakest of economic woe, consumers will buy products and services. They’ll just be a lot more careful about it. You will find it much more worthwhile pursuing those extra purchases from your top customers than you will trying to kick-start a relationship with cagey and frugal new ones.
Charlie Fewell has over 30-years working as a trainer and management head for AC Delco and now runs his own business consulting firm Charlie Fewell & Associates that specialize in transitional leadership and business development. For more information visit www.CharlieFewell.com.