By Ken Andrews - Friday, November 27th, 2009

When times are tough and new customers are scarce, the importance of positive relationships to retain existing customers should be self-evident. But how should you go about it? What practices and policies must you implement to ensure valued customers remain loyal?

It begins with your staff, all of your staff. No matter how junior, how senior, how seldom an individual employee engages with a customer, each member of your team has a crucial role to play. The front desk receptionist, bookkeeper, or cashier is as much an ambassador for your business as the manager of your sales or service department. As the business owner/manager, your job is to ensure each employee has a clear understanding of how the organization must adapt to the times and where they fit in, with clear direction and whatever training or other support is necessary.

Why? It all comes down to service. When times are tough and money is tight, customers invariably focus more on value. They comparison shop far more diligently and will opt for the product or service that they perceive provides the best value. To avoid your product or service being commoditized and evaluated solely on cost versus benefits, providing personal and attentive service that focuses on identifying and addressing the customer’s pain points is crucial. How you engage with customers and prospects, how you identify their needs and respond to them, so they feel they are being helped, rather than sold, will make all the difference.

Focus everyone and everything in your organization on the customer:

• Make it real for every single employee, not superficial.
• Provide real-world practical training to make it happen.
• Look for fast ways to improve service (such as having a live person pick up the phone rather than frustrating callers with an automated system).
• Ask customers what you can do more for them.
• Make contact personal, not email.
• Improve every aspect of customer responsiveness (make it faster).
• Look for little ways to increase value for the customer (such as service deals).

Back-off on the big marketing investments. Instead, do your research and focus on opportunities that reach a more relevant audience. There’s no point in putting out the big bucks to get before 5,000 prospects if you know only 500 of them are fit your customer profile. For example, favour:

• Intimate seminars near a cluster of customers, instead of a big trade-show.
• Use direct marketing rather than grape-shot, such as ads in specialty magazines rather than national newspapers or TV).

Look at your competition, because they are no doubt looking at you:

• Copy their best ideas.
• Exploit their weaknesses.
• Consider hiring their best people.

By the same token, aggressively search for best practices in your sector. Third party business-to-business research organizations such as APQC and ISBM have a wealth of research available on various industry sectors.

Reduce costs and overhead, without compromising customer satisfaction. There is a distinct difference between cutting the fat, maybe even a little muscle, and cutting into bone. Don’t be penny wise and pound foolish by implementing cost reduction strategies that negatively impact your level of service or ability to bring new business in the door. What you can do is:

• Ruthlessly cut back on internal reports.
• Provide employee incentives for cost reduction ideas, which are implemented and work.
• Attempt to reduce operating costs in areas such as re-negotiating your lease, or finding a better deal on office services such as telephones and IT support.
• Work with your suppliers – do not unilaterally extend payment terms; you need allies, not adversaries.

Don’t lose focus by trying to implement too many organizational or operational changes at once. Focus on only one or two modest initiatives at a time, then:

• Measure their effectiveness.
• Stop what isn’t either increasing customer retention or reducing fixed costs.
• Don’t be afraid to experiment with a new idea for a short time.

Make customers feel valued by giving them direct access to the senior people in your organization – particularly yourself. Solicit your customers’ feedback and opinions on how your product or service can be improved, or what new products or services you should develop:

• Ask customers what they want, rather than to critique a new service idea (seek guidance on the best ways to have these interactions and hear meaningful feedback).
• Re-focus your team on thinking from the perspective of the customer (such as on benefits, rather than features).

Remember, you’re not in business to make money. You’re in business to serve a need. If you imbed this philosophy in the culture of your organization, success will follow.

Category: Expert Advice.
Industry: Retail, Technology, Services
Functional Area: Marketing
Tags: customer relations, customer service