Your customer is yours for the losing, says Mario Pretorius in his latest tip. His lifetime value to you as your customer should not only be protected, but enhanced. So, if you love him – and you should – show it. Get him happy and loyal and he will not only be become a bulwark against competition but also a valued name on your reference list.
Understand and calculate the Lifetime Value of the customer’s business. Protect & enhance this.
You are already familiar with Big Numbers, here’s a way to exercise that capability. What are your 10 best clients worth, at sales growth of 5%, margin improvement of 5% over the next 20 years, present value at a 3% discount?
Not calculate how much is that worth per hour from now to then, and how much you are getting paid for those hours. Perhaps it is a good investment to go see them rather regularly, say every 3 months – how much would they have accumulated for your benefit in that period and how much would it cost you in time and effort to spend an hour with each? This is assuredly an incredible return on investment.
Some opinions have it that it is far easier to sell more and new to a current customer, other opine that it is also much cheaper to service a current account than to get a new one.
Common sense says your customer is yours for the losing, get him happy and loyal and it’s a bulwark against frustrated competition and a values name on your reference list.
IF you love your customer, how are you showing it? By sending a monthly b&w demand of pay-me-or-else? Is that your most frequent customer contact?
Our invokes start with: Our esteemed Customer XXX”
It ends with an 8page, full colour graphic rich analysis of his entire usage last month, showing trends and other useful information.
But that comes after the most important part: We send a cheque with the exact amount that our services saved over his previous supplier.
We validate our promise – every month without fail, No savings, no contract.
Our debtors people are called Customer Relationship Managers – they often talk to the customers more than anyone else. They get to see the good customers as well as the recalcitrant ones.
The we have the ‘melktert’ strategy. The melktert is a typical Boere pie, served with coffee and has a little dusting of cinnamon. It is delicious.
Our CRM’s and Sales pack a melktert for visits to the Great and the Horrible.
The first question, face to face, with an important non-paying customer is always: What did we do wrong, you used to pay us, did we screw up something? We’re extremely sorry, let’s share the melktert, tell us about it and then we can fix it.
No confrontation, just people-buy-from-people affirmation of the importance of the relationship for us. Our debtor’s days have been hovering around 14 for the last decade. The melktert costs about $2. Figure THAT investment.
This tip is an extract from the manuscript of “The Unconventional CEO: Common sense outside of conventional Management thinking” (by Mario Pretorius).
