As I sit down to write this column, the stock market has lost 13 percent of its value, down some 900 points since April. Major indicators now point to an economy just outside of bear-market territory. In business, as with most everything else, people will see that the glass is either half empty or half full. No matter what conclusion is drawn, there are important actions you can — and should — be taking to retain your customers.
Remember the popular rock song from Bachman Turner Overdrive? The lyrics are right on — “Taking care of business, every day. Taking care of business, every way.” Those words could never be more true than they are today.
Frankly, when times get tough, you have to pay even more attention to the needs of your best customers. Now, more than ever, or at least in the past few years, you need to keep customers satisfied but especially those from whom you derive the most value. Remember, a happy customer will tell at least five other people about the experience with your business. And many of those will do business with you in the future. Unhappy customers? They’ll tell a lot more.
The best opportunity for increasing sales in uncertain times is by paying close attention to your client base. Losing customers is expensive. It’s estimated to cost an anticipated 500 percent more to land a new client than it costs to take care of one that is already doing business with you.
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Identify your most valued clients, understand their needs and most critical challenges, study their buying patterns, and call on them regularly. Sounds simple and logical, but many businesses often overlook the simple and logical to their great dismay.
Fortune 500 companies like Hewlett Packard, Xerox, IBM, Honeywell, Cisco and others attend to this task by making significant investments in sophisticated Corporate or Strategic Account Management programs. These systems are planned and programmed to provide the very best customers with the extra attention and service they want and deserve.
Some programs are very successful while others deliver less than expected returns.
Joseph Sperry, one of the authors of the book “The Seven Keys to Managing Strategic Accounts,” explains, “Account managers assume that customer longevity is customer loyalty. In so doing, they can set themselves up for a big fall.”
In the book, the authors provide decisionmakers with proactive programs for profitability by managing their largest, most critical customers — their strategic accounts. The text also provides examples of how many of today’s market leaders have learned to focus on their most important customers. We all need to avoid common mistakes before they cripple a relationship with a client.
Dr. Bill Ross, marketing professor in Penn State’s Smeal College of Business agrees. “The business climate today has companies looking for creative and innovative solutions. While strategic account management is important, it’s not enough unless account managers are presenting their most valued customers with unique solutions to help with their most critical needs,” he said.
So where do you stack up? How effective are you at protecting your strategic accounts?
Sallie Sherman, president and CEO of S4 Consulting, Inc., a leading-edge provider of strategic account consulting based in Columbus, Ohio, has created a set of 16 questions to spur thought and action. These questions are designed to provide the insight necessary for success.
Here are a few sample “yes or no” questions for your consideration:
u Can most of the employees in your organization name your top ten accounts and say how they use your products and services?
u Have the strategies and goals of the strategic account management program been documented and communicated throughout your company?
u Do account managers have well-documented account plans that they use on a regular basis to manage their best customers?
u Does the organization view your corporate or strategic account management program as a competitive advantage?
Hopefully, you were able to answer “Yes” to all the above. If not, you have some things to address.
Taking care of your best customers is always the right thing to do. Taking special care of them in an unsettled market is the “only” thing to do.
Join me on my blog “Thinking Ahead in Business,” where this discussion will continue.
Patrick Cataldo is associate dean for executive education at Penn State’s Smeal College of Business. Write to him at firstname.lastname@example.org.