Retaining your best customers in difficult times
Check out episode 4 of the Key Customer Growth Podcast for more on protecting your customer relationships.
We all go through different seasons with our customer relationships. What we can sometimes miss is that these seasons require very intentional approaches and proactivity.
- Unwanted stagnancy
And so on…
One of the biggest seasons to consider in our key customer relationships is that of disruption, which can threaten the progress and continuation of any relationship or opportunity.
Disruptions can take many forms, often coming with the most force in times when fear is high, like market downturns, a customer’s loss of key people, new legislation or austere times.
If we are not careful, a customer may not fully emotionally, intellectually and practically understand the value of our products and services. It is very likely in times of disruption they’ll see you as just another project or worse yet, just another cost to their business.
The good news is, we can do something about it.
The bad news is we have little to no control over what happens to our customer.
So, how do we ensure all the investment of time, energy, money and resources into our most important customer relationships don’t vanish because of a potential or imminent disruption?
We need to consider a different range of considerations.
It is not about activity, it is first about evaluation.
There are three key evaluations to understand exactly how ready we are to meet big disruptions, in whatever business or industry.
- Evaluate the effectiveness of your measures for identifying risk to customer churn/defection.
- Evaluate your ability to quickly and effectively mobilise and engage the right people and teams internally for you and your customer’s business.
- Evaluate how able you are to find root cause problems and execute plans.
Let’s dive a little deeper into each evaluation, to know the actions to take.
MEASURES TO IDENTIFY RISK IN YOUR CUSTOMER RELATIONSHIPS
Evaluate the effectiveness of your measures for identifying risk to customer churn/defection
Your ability to identify customer risks before they happen is a critical skill and process we need to develop. It is important we know of companies that have spent years developing and redeveloping processes to more accurately read the behaviours of customers and their own internal actions.
In order to begin that process, we have to define those potential risks to a customer.
- Risks to your contact(s)
- Risks to their company
- Risks in their market
What is the disruption?
New market legislation that increases costs to their services
|RISKS TO CONTACT||RISKS TO THEIR COMPANY||RISKS IN THEIR MARKET|
|Forced to review internal strategies||Lower revenue and increase costs||Less competitive and potentially vulnerable to the competition|
What are the potential responses?
|Stop existing projects and start to have more cost-focused conversations||Ask the business to reduce costs and begin to look for new ways to optimise||Look for new partnerships and suppliers|
It is well worth taking an hour with your colleagues from various departments to identify potential risks. Once you have this written down, and made visible, you have more power to act.
I’ve often referred people to the article on learning from customer defection by Bain & Company researcher and author Fred Reichheld. Within it, he raises important points to think about when dealing with customer defection or churn.
“By searching for the root causes of customer departures, companies with the desire and capacity to learn can identify business practices that need fixing and, sometimes, can win the customer back and reestablish the relationship on firmer ground.”
While you may not have the chance to go back to customers who have already left, you can learn from your current customer interactions, feedback and surveys to ensure you have responses to those important queries.
Creating your defection evaluation process is vital.
Here are four initial steps to get started:
- Evaluate the risks to potential long-term purchases you bring.
- Look at the commonalities of challenges faced by your customers in their market that impact their behaviour with you.
- Note down what those responses might be or have been e.g. lower consumption, larger discount requests etc.
- Identify appropriate ways to measure and track what can be reviewed monthly as a minimum.
I’d also invite you to consider the five-year project work we’re doing on behavioural analysis of customer health evaluation. We call this the 7 Signals, that brings greater clarity and immediate action as to where the health of your current customer relationship(s) might be today.
MOBILISE FOR ACTION
Evaluate your ability to quickly and effectively mobilise and engage the right people and teams internally for you and your customers business
Does every person, in every department of your organisation know what their role is in creating success and loyalty with your most important customers?
Don’t worry if your internal answer is a hand over your face NO! This is the case for most companies, but you can get to a YES.
The fastest way is to think about teams differently.
You must first begin at a local level by creating a team of representatives from departments who have direct contact with a set of identified key customers. Why?
Because one person cannot see everything about a customer, you need data and you need others to challenge perspectives to bring insight.
Before you decide on a solution, you need to know how to bring in a team and the importance of why.
Discern: Be aware of who needs to be on the team, when and why.
Identify: Choose who’s right and clearly define their roles.
Coordinate: Harmonise the team and set expectations, especially around how you’ll work together effectively.
Engage: Hold people accountable and model the best practice communication you want.
This is about activating the true power of collaboration.
Collaboration is the ability to harness the skills, expertise and intellect of two or more people to a common purpose to achieve better and greater results together.
But, It doesn’t happen on purpose.
Ideally, go through the process slowly the first time building champions by department areas. You’ll then have access to a super force built to solve customer relationships problems. You may find the work by Tim Sanders on Dealstorming helpful to go deeper.
MOVE TO EXECUTE
Evaluate how able you are to find root cause problems and execute plans
In chess there are literally hundreds of opening moves someone can deploy but only a finite number of responses. Each of those responses requires a clear view with anticipation of the other players’ options.
When it comes to crafting plans with and for our customers, we have to take a much deeper and broader view of a situation in order to know what potential moves we need to execute well.
If the legendary leadership author and speaker Tom Peters were here, he’d say…
“The thing that keeps a business ahead of the competition is excellence in execution.”
This is no different for your customers in dealing with potential obstacles that might be in the way.
First, you must know what you’re really executing on, which includes a root cause analysis.
Most people do not consider root cause analysis as part of execution, but it is essential.
You cannot possibly create powerful plans that deliver consistent results without understanding the real problem you are solving.
Here is a simple seven-step process to problem-solving a root cause at the execution phase:
Phase one – Root cause
- Define the problem – What is it really? Do you have all the data to understand it?
- Explore – Seek all the possible causes.
- Solution – What are all the options?
- Implications – Know all the ups and downs.
Phase two – Execution
5. Decision – What is the best choice?
6. Action – Put into practice to own, track and measure.
7. Evaluation – Review did it work?
Let’s talk briefly about executing on plans, which is significantly more difficult to do than planning.
- Get focused – be very clear on the problem you’re seeking to solve and define the one thing that matters most.
- Get accountable – you have to express not just how important solving the problem is, but also how important each person is to solving the problem. The more connected we are with a shared purpose and importance, the greater commitment we have.
- Get connected – communicate as often as needed. The more you do, the better you’ll understand each other’s preferences and best practices, and the faster you’ll improve.
Above all, the key idea is to be prepared. These actions are not just built for times when you identify risk. You can apply these strategies and approaches when looking at potential customer opportunities, innovation and more.
If you’d like to know how you can create customer playbooks and truly powerful risk identifiers, get in touch with my team https://jermaineedwards.com/contact.
Until then start protecting those relationships and become the adviser your customer never wants to leave.
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