RELATIONSHIPS TO THE FORE

It’s very important to hold on to your valued clients – Dr. Muneer Muhamed

Businesses that don’t focus on customer relationships and retention are always replacing clients who walk away. In uncertain times such as the post-pandemic period and amid the country’s economic crisis, the first priority should be to retain customers.

After all, it costs several times more to acquire a new customer than to hold on to an existing one.

As we move through a recovery period with slow or negative business growth, business leaders should pursue four activities to ensure the best returns on both customer franchise and shareholder equity.

First, they need to understand the business climate and the effect it is having on their customers.

Then these business leaders need to use this knowledge to set a strategic direction that focusses on customer retention, and create value added products and strategies to help their clients meet their needs and goals.

Thereafter, they must arm their sales force with the most up-to-date information about customers’ needs to make sure that mutually beneficial, targeted solutions are presented to clients.

And finally, senior executives must ensure that the analyst community recognises the company’s strategies and business results, so that they translate into increased shareholder equity and positive word of mouth.

Maintaining stability in business relationships is one of the most important goals of most companies.

Many organisations have spent millions of rupees on the customer relationship management (CRM) promise by capturing information about clients, and their buying habits and needs, to customise their marketing and sales approach.

Yet, more than 75 percent of enterprises are incapable of combining a comprehensive view of the customer with inter-actionable, personalised advice to clients or sales/service agents.

Customer strategies, and revenue and profit goals, need to be based on explicit customer driven criteria that feed into a unique strategy for each major client account. Today, such perspectives must be forward-thinking since historical realities may or may not prevail.

Suppliers who are successful in understanding their customers’ current needs and supporting their goals will retain more clients, and reap the benefits of increased sales and higher revenue. To achieve this, management needs to establish an in-depth dialogue with the customer base.

Engaging in interviews produces the tools and information one needs to set the business direction, and project revenue and profit targets. The information the sales force needs to capitalise on the profit potential of major accounts will come out of this process.

There should be a qualitative analysis of the specific issues, objectives and business strategies for each account. The sales force needs to understand the internal and external metrics that will influence buying decisions and capacity.

Furthermore, they should be aware of existing or historical issues that affect strategy and client culture. And a specific account plan based on an independent business analysis of their current and future communication needs to be generated.

If the company develops a solid picture of the quality of its customer relationships, it is positioned to support the emerging needs of its existing accounts. The management’s role is to create the focus, and provide the tools and products for success.

Once marketers have focussed on aligning their strategy with customer retention, they will be able to translate it into meeting the company’s revenue and profit projections. Marketers will also need to develop a positive image in the marketplace, which would enable them to attract new business through referrals and contain customer acquisition costs.

Picture making this statement to stock market analysts: “In the light of current conditions, we have performed an independent audit of our best customers to determine their needs and general propensity to buy from us. We’ve also identified necessary changes to our strategies and value propositions – changes that are currently being deployed. We’re confident that we understand customer needs and what’s required from us to fulfil those needs to meet our forecasts. And we’re building a feedback mechanism to ensure that we stay on top of these crucial criteria.”

For shareholders to profit from a customer focussed strategy, companies need to make sure that financial analysts recognise the results and reflect them in their view of the company’s performance.

Although your business may be talking to customers on a regular basis, marketers will benefit from having interviews and pulse checks administered by an unbiased third party.

To sustain the competitive advantage gained by focussing on customer retention, companies need to continue to survey key account contacts. Such a process also acts as an early warning system, helping to identify emerging trends, personnel changes and customers at risk of attrition.