Estimates that 20 percent of customers account for 80 percent of total revenues in some businesses is a wake-up call! Finding new business a climate like that is expensive, and often unrewarding. As Barry Stamos points out in “'Best' Customers: More Profitable Relationships” (Email Marketing Newsletter), “Why spend resources attracting new customers until optimizing
profitability of your client relationships?”More Bang for Your Buck
Customer Relationship Management (CRM) is organizing and maintaining strategic connections with clients and customers to turn that sorry 20/80 stat on its ear.
“Successful CRM is about competing in relationship dimension” explains Bob Thompson, CEO, CustomerThink Corporation, “Not as an alternative to having a competitive product or reasonable price- but as a differentiator. If your competitors are doing same thing you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier--sustainable--relationship over long haul.”
Putting Clients First
Service is a client-centric activity, but there’s plenty in it for you, too. For small-business owners (SBOs) and independent professionals, developing and managing healthy client relationships and providing superior service increases cross-selling and up-selling opportunities, and can spin off endless chains of high-leverage qualified referrals. Building on your client base also increases profitability, by cutting front-end marketing time and costs; but it’s quality of those relationships that affects persistency, enhances your professional reputation, and can lead to future business from your hard-earned clients.
Technically, of course, when you make a sale, you don’t have a “client,” you have a “customer”. A customer is someone who buys from you once; a client is someone who will buy from you, again and again. Clients who trust you and your expertise will come to you (and maybe only you) for your products or services. A client relationship is one in which both buyer and seller agree that first transaction was not a one-time event.
Client Relationship Management goals are clear:
•Being seen as confident, competent professional;
•Proactively servicing your existing business and providing extra value;
•Meeting additional needs as clients’ situations change, and…
•Earning prestige recommendations or introductions to other qualified prospects.
The buyer must accept “Client” status, however, it’s not a label that can be stuck to buyer by seller. Client relationships must be cultivated and nurtured to stay healthy. To borrow a line from former New York City mayor, Ed Koch, simply asking clients, “How am I doing?” is a great way to find out.
