Stop Customer Churn by Managing Moments of Truth

Is customer churn draining the energy, profits and brand equity out of your company? If it is then you need to stop the customer customer churnchurn immediately. Committing your company’s resources to acquiring customers only to see them leave during the next buying cycle is a prescription for failure. Stopping churn requires you to examine you relationship with your customers throughout the customer experience.

In any relationship, whether it is a marriage, a frien­dship, or a sales relation­ship, there are phases when problems or conflicts are apt to arise. If such dilem­mas are not confronted and resolved early on, the pre­mature dissolution of a partnership may result. In the case of a customer part­nership, there are phases when the buyer’s expecta­tions of your prod­uct or service are tested. During these times you must prove to your customers that your product or ser­vice is their best alternative. Such confron­tations are called Mo­ments of Truth, and how you handle them will deter­mine the longevi­ty of the rela­tionship.

Moments of Truth are the real acid tests of long-term part­nerships. If your product or service per­f­orms as intend­ed and de­livers the benefits the cus­tomer is seek­ing, ev­ery­one is happy and the rela­tion­ship is se­cure. On the other hand, if the product or service fails to per­form or deliver the expected benefits, the custom­er is unhappy and the rela­tion­ship is in jeopar­dy. This is the starting point for customer churn.

A Moment of Truth can occur at any time, in a vari­ety of situa­tions. However, to best under­stand these mo­ments, it is helpful to focus on the six most common sales situations that constitute Moments of Truth. Because of their frequency and potential impact on the sales relationship you must master the skills demanded by each of these six Mo­ments of Truth:

  1. When you’re making the sale.
  2. When the product is delivered or the service begins.
  3. When you discover a problem.
  4. When the customer complains.
  5. When the competition puts on the pressure.
  6. When you make your regular customer retention contacts.

To ensure that you handle each Moment of Truth successfully you’ll need to develop a specific plan for each one. Having a well developed plan increases your chances of solidifying the customer relationship and in stopping the cause of customer churn.

How to Retain Customers on a Regular Basis

how to retain customers How to retain customers on a regular basis is an important step for increasing sales, profits and customer loyalty. Here are three reasons why.

  • Most (68%) customers stop doing business with a company because of indifference.
  • Existing customers are more profitable long-term than new customers.
  • It costs 5-6 times more to gain new customer than it does to keep an existing customer satisfied.

That’s why one of the cardinal sins of selling in the New Economy is taking your customers for granted. Failing to communicate or stay in regular contact leaves the door open for prob­lems to arise and temptations (the competition)to enter the picture. If the lines of communication aren’t open, the cus­tom­er may not remember you or won’t think to notify you if a problem occurs or a reorder is desired.

As a salesperson and as a company it’s important to have programs in place on how to retain customers that is effective and efficient. This will maximize selling efforts and deliver the best bottom line results.

In the New economy it’s not enough to just stay in touch. Staying in touch is important but it’s only half the battle. Once contact is made, you must use the opportunity to the maximum advantage. This means that when you make customer  retention calls they must be:

Unique. Each call should have its own unique reason for existence (follow-up on a new product, information on company inno­vations or changes and new incen­tives).  Provide the customer with new information, ask additional questions, tackle varied topics.  Your customer does not want to rehash old information or waste time.

Memorable. Make each call count by making a lasting impression on the custom­er.  Customer retention calls are a personal­ly deliv­ered commercial for your product or service.  Offer your customers “food for thought”, make them laugh or give them something to remember the call. If you don’t do something to stand out in the “sea of sameness” your message will forgotten soon after you leave the call.

Personalize. Since most sales are emotional decisions supported by logic you must use theses call to connect with your customers on an emotional level. Helping your customers emotionally identify with you. your product and your company is an essential step in building customer loyalty.

Many salespeople view customer retention calls as perfunctory at best and occasionally a waste of time. Miscalculating the importance these calls usually leads to the deterioration of a relationship and ultimately lost sales.

How to retain customers on a regular basis must become a priority if you want to protect your most important asset, your customers. Remember the saying, “If you don’t take care of your customers someone else will!” Put a customer retention plan in place today.

To learn how your customer retention plans stacks up take the Growth Positioning Survey now.

Building Customer Partnerships in the New Economy

Building Customer PartnershipsBuilding customer partnerships is essential for success today. Why? The New Economy demands a new approach to selling and so the world of selling has changed. Rela­tively simple times have given way to a selling environment influenced by eco­nomic, political, technological, and demo­graphic factors. The fact is, if you don’t think beyond your own product or services, and don’t adapt your selling approach to the changing times, you will be blind-sided by the competitors who do.

       The traditional selling approach focuses on a single event persuading the sales prospect to say yes to an offer of a product or service.  In each case, the selling process is a series of linear steps: pre-ap­proa­ch, ap­proa­ch, needs analy­sis, presen­tation, nego­ti­a­tions, close, and ser­vice. There are varia­tions to this tradi­tional ap­proach (and hun­dreds of sales tech­niques), but the bottom line is always the same: If you are suc­cessful in the process, you will reach the objec­tive a closed sale.

       Suppose we turn that process around to focus on customers. Suppose we place the value of winning customers above that of making a single sale. Suppose the goal is not to sell a product or service but to win customers. What have we accom­plis­hed?

       First, we have changed our perspective from short-term to long-term. A “repeat” customer is significantly more profitable in the long run than a “first-time, one-time” buyer.  Second, a steady customer produces better cash flow.  Third, the cost of re­taining a current customer is less than that of pros­pecting for a new one.  Fourth, an existing customer repre­sents a better potential for new or add-on servic­es with less asso­ciated sales ex­pense.  And final­ly, a satisfied customer is our best form of ad­vertis­ing, repre­senting an excel­lent source of refer­rals.

       In reality, successful sales­people usually hit their tar­gets. If your goal is per­suading the customers to sign a contract with your compa­ny, your past perfor­mance tells us you will not fall short. But simply making a sale falls short of the real goal of win­ning customers. And there­in lies the theory behind build­ing customer partner­ships.

       Building customer partnerships is built on a foundation of ten principles. Understanding and adapting these principles can help you become a more successful salesperson.

Principle 1: People buy for their reasons, not yours.

       You know exactly why you want to sell the customers on your products or services.  The more customers you sell the better off you and the company will be at the end of the year. Customers also have equally strong reason for buying. Perhaps they want to save money for their com­panies, as a way of increasing their worth as employees.  Or they’ve had a bad experience with your competitor and are looking for a supplier who will eliminate headaches. The important thing to remember is that customers always have their own unique reasons.

       Finding out each customers’ buying motive is a key element of building customer partner­ships. Therefore, it is impor­tant to listen to what the customers says and how he or she says it. When you’ve uncov­ered the hidden motive, you can start aligning the features and bene­fits of your product or service with the per­sonal needs of the customers. Once customers see that you can satisfy their needs, they will do whatever is necessary to do busi­ness with you.

Principle 2: People buy solutions, not products or services.

       A consumer does not buy a car because it has four wheels and two doors; a consumer buys a car because it provides transportation from point A to point B in a style the consum­er finds to his or her liking. Likewise, customers are interested in what your services can do to help solve their problems or make life easier for them. For example, buyers care less about details of how you make your product than how that product’s superior features will benefit their company.

       To be a top performing salesperson, you must transform the features and advantages of your products and services into terms customers can understand, appreciate, and apply to their own situation. When you do this, you’re building a partnership with the customers, not simply selling the customers a product or service.

Principle 3: The act of buying is a series of decisions.

       Just as you size up customers during the initial meeting, those customers are making a series of decisions about you, the company you repre­sent, and what you have to offer. Customers are also analyzing what they are currently using to service personal needs, its cost and dozens of other factors known only to customers.

       If you realize the act of buying is not a single deci­sion but a series of deci­sions, you can concentrate your efforts on learning which decision is currently uppermost in the customer’s mind. When you do that, you will be able to provide the infor­mation that will result in a favorable verdict and move the process along smoothly.

Principle 4: Decision-making follows a logical sequence.

       Each step in the decision-making process is made in a logical order. But the emotions and speed behind each decision will vary with each customer. For example, a customer may require several sales calls to accept you as a salesperson, but then move quickly to a final buying decision. Another customer may reverse the process. Consequently, you must be aware of each customer’s unique deci­sion-making process. By listen­ing, observing, and questioning, you can learn where the customer is in the decision-making process. How you interact with a customer at one stage determines when or if you earn the right to advance with the customers to the next stage.

Principle 5: Customers decide by differen­tiating.

       Contrary to popular belief, there is no such thing as a commodity product or ser­vice. Not in the minds of customers. They will always find ways to determine differences between your services and your competitors’.  Price is one differentiator. But so are conve­nience, quality, timeliness, and dozens of other factors. A more appealing, well-thought-out sales approach may also be considered as a differentiator in the decision-making process.

       Assuming you don’t want to sell on price differentiation, it is critical for you to help the customers see tangible (and intangible) differ­ences between your services and those of Company X. Once you have created differ­ences in the customers’ mind, the buying process will move forward. Failing to do so may cause the customers to develop their own differentiation criteria, which may or may not be favorable to you.

Principle 6: If you don’t differentiate, your competitors will.

       This is really a corollary of Principle 5.  Call it the art of positioning. You want to estab­lish a positive image of yourself, your compa­ny, and your products or services in the customer’s mind before a competitor has a chance to differentiate his services. Much like a military campaign, it is easier to defend a position than attack one. In many re­spects, the sales “battlefield” is the customer’s mind.  Salespeople who establish­ their position first, by differentiating best, will win the battle and, ultimately, the customer’s trust and business.

Principle 7: The cornerstone of selling is trust.

       Remember, our goal is to win customers not just to make a fast sale. You may manip­ulate customers into buying once, but you won’t establish a customer partnership until there is trust. Since most salespeople go for the close, customers have developed elaborate defense mechanisms to put sales­people off guard and avoid a decision.

       You could try to break down the customer’s defenses, but what you will end up with is an adversarial relationship. Rather than attacking, you need to create an atmosphere of trust. If customers trust you, they’ll tell you their needs and expectations, what they really want. If you can get them to talk about what they want, they’ll listen when a solution is presented. If they listen to what you’re proposing, they’ll believe it. If they believe, they’ll continue to buy. Which is how building customer partnerships leads to long term success?

Principle 8: Trust must be earned and then re-earned.

       Just as in a friendship, trust is something you must earn time after time, day after day, contract after contract. One slip: on your part a broken promise, a false claim, a breach of trust and you risk losing more than a sale. You may have lost a hard-earned customer.

       The objective is to establish the fact that you are committed to the customers, that you will always act in the customer’s best inter­ests. This is done not through words, but through deeds. It becomes an attitude on your part. But it also must be a quality that comes through loud and clear to the customers on every sales call, includ­ing the first.

Principle 9: Know where customers stand at all times.

       Establishing a partnership is a dynamic process. At any time, the customers may be moving from one decision-making level to another: from skepticism to trust, from nega­tive to positive, from reticent to ready. The successful salesperson is constantly aware of where customers are in the buying process.

       As you prepare for your sales call, think of the process as a loop. First, gather your facts and plan your sales strategy. Then, when face to face with the customers, react to what the customers says, present information, discover information, and manage the sale as you guide the customers through the decision-making process. Finally, after the call, evalu­ate where you are, what was accomplished, and your next steps with the customers.

       This allows you to plan and control the next phase in the buying process by address­ing issues important to the customers and by building your trust level.

Principle 10: No two customers are alike.

       That’s not exactly an earth-shattering revela­tion, but it’s surprising how many sure­fire sales programs fail to recognize that customers (and salespeople) are individuals with different needs, unique styles, and distinctive ideas about how they’d like to sell and be sold.

Summary

       Building customers partnerships in the New Economy is not based on patterned responses to projected sales situa­tions. Instead, it’s based on an approach that takes best advantage of ten sound selling princi­ples, basic human beh­avioral tendencies, and common sense. After learning the approach, you’ll discover, with growing confidence, that no matter what type of person you’re dealing with, or what the competitive challenge, you will be in a better position to establish a long-term partner­ship with the customers.

 

Sales Management Strategies: Making Sales Calls with Your Reps

In today’s demanding marketplace sales managers must have strategies for increasing sales and developing people. Besides enhancing relationships with customers making calls is the best opportunity to do both. This article outlines strategies for making three different sales calls that will drive sales and develop your people. They are:

• Training
• Joint
• Coaching

Each has a different purpose, strategy and the roles for both you and the salesperson are also different.

Training calls teach the salesperson how to do a specific aspect of the job. Your make the presentation while the salesperson observes. The key to a success is for you to demonstrate proper selling skills and techniques. Your job is to give the salesperson an effective model and make sure the salesperson understands how to perform the aspect of the job you have demonstrated. Before the call, make sure the salesperson knows:

  • The objectives (both performance and development)
  • The skills or techniques you are demonstrating
  • His/her role

After, be sure to review the following:

  • Were the objectives achieved?
  • What helped?
  • What hindered?
  • How else could the call have been made?

Joint calls support a team approach. Both you and the salesperson have defined roles and responsibilities. Before, make sure you review the following:

  • The objectives (both performance and development)
  • The strategy
  • What role will each person play?
  • Who is responsible for each segment of the call?
  • How will you interact during the call?

After, you should discuss:

  • Were the objectives met?
  • What helped?
  • What hindered?
  • How could the call have been improved?
  • Who is responsible for following up on commitments made during the call (if any)?

Coaching calls are designed for you to observe and assess the salesperson’s performance. The salesperson’s role is to make the sales call. Your role is to observe and offer feedback after the call. Coaching calls are a true test of your listening and observing skills, not your selling skills. Before, be sure to cover:

  • The objectives (both performance and development)
  • The strategy
  • Responses to obstacles that may come up

After, discuss the following:

  • Were the objectives met?
  • What helped (what were the salesperson’s strengths)?
  • What hindered (what were the salesperson’s improvement opportunities)?
  • How could the call have been improved or handled differently?
  • What actions need to be taken next

Seating relative to the customer is important on each situation. The key is for you to situate yourself consistent with the agreed upon role and objectives. Use these guidelines:

Training calls-Position yourself closest to the customer so that the salesperson can observe easily. Also the proximity to the customer establishes that you are taking the lead.

Joint Calls-Sit side by side with the salesperson. This signals equality of your roles and makes it easy for “handing off” to each other.

Coaching calls– The salesperson should be closest to the customer making sure that you are out of the salesperson’s peripheral view. This positioning establishes the salesperson as the lead and helps prevent the salesperson from presenting to you instead of the customer.

To increase sales you need a well-trained and high performing sale force.Making sales calls with your salespeople gives you the greatest leverage points for developing them and making sales. To make sure you have successful call strategies set clear expectations and define roles.

 

 

The Secret to Solidifying the Customer Relationship

Solidifying the customer relationship is essential for sustainable sales, profits and customer loyalty. This means you must manage the  relationship through the entire customer experience. From first encounter to asolidifying the customer relationship customer becoming a raving fan every customer touch either adds to a positive experience or detracts from it. How you handle each touch determines the direction of the relationship. We call  these touches moments of truth.

The Problem

One of the essential moments of truth in solidifying the customer relationship is when the product arrives or service begins.  When people make a purchase decision, they are, in effect, buying a promise that the product or service will deliver certain benefits.  If the product or service does deliver on its promise, the relationship is enhanced.  However, if the product doesn’t deliver, the relationship is in jeopardy.  Consider the impact if you had to wait an hour for your food at McDonald’s, or you were totally ignored at Nordstrom’s department store.  You would be disappointed because your expectations weren’t met.  This rarely (if ever) happens at these two companies because they train their people to successfully manage this moment of truth.  Many salespeople miss the opportunity to solidify the customer relationship because they are off to the next sale.

 The Solution

Personally delivering the product or contacting the customer when service starts is essential for building long and productive sales relationships.  To maximize the success of this approach be sure to do the following:

  • Reinforce the original reasons why the customer decided to buy.  This will support the customer’s original decision, preventing buyer’s remorse.
  • Identify issues or concerns.  If there is a problem, use it as an opportunity to demonstrate responsiveness and commitment to customer satisfaction.

Establish positive, realistic expectations for the product or service.  Make sure the customer is properly educated so that he or she can take full advantage of the purchase.  Address potential problems immediately.

Following these simple but powerful steps will go a long way towards solidifying customer relationships and enhancing your sales success.