Better client research can help increase billings in difficult times.
An industry leader called and asked me to develop a customer relationship management (CRM) program. They sensed they were leaving money on the table. Their instincts were right. In researching their top five clients, we found something very interesting. While their firm did $30 million in revenues, their top five clients sent $41 million to their competitors. That’s $41 million that they left on the table. In talking to the top two clients, one client freely said, “If your client improves their service, we will increase their business exponentially.”
My client’s client welcomed the interest and their desire to improve. This particular client spent $8 million with my client and $23 million with the competition. (Sometimes, it’s not the total dollars a client spends with you that matters as much as how much total they spend with all your competition).
How much are you leaving on the table? If the above numbers capture your attention you may recognize the opportunity. Here are three simple strategies to gain greater market share by turning one-time customers into lifetime clients.
What do clients want? Determine what your client spends total in your category. If you sell interior design, how much other interior design does a client buy? A client may give you $2 million and still spend $8 million elsewhere. It’s important to know this.
How do you find out?
The first step is simply to ask what a client spends a year in your category. They may also spend money in one category to you but not in any others you provide.
The second step is to better understand your client’s complete needs. What are their goals? What are they trying to accomplish? How do you fit into their overall plan? One-time customers become long-term clients when you better understand their complete needs.
Determine what in particular prevents your client from giving you additional business. After you determine what a client spends total in your category, the next step is to determine what prevents the client from giving you more business. How do you do this?
Again, ask the client directly. After all, you don’t experience your service, your client does. You need to understand their experience. It’s not what we think about our service that matters: it how your clients experience your service that ultimately matters. In the above case, my client’s major client was more than happy to share a multitude of improvement suggestions both major and seemingly minor that would allow them to capture the $23 million left on the table.
You should hear suggestions that appear minor and issues that are as important as constantly improving quality and speaking the same language on quality, both issues that my client’s client mentioned.
The more issues you turn up the greater the opportunity to earn more of a client’s business. In addition, a surefire way to gain more of a client’s business is to help your client be more profitable.
The adage about walking in the client’s shoes is a good one. I am always surprised at how few firms take the time to discover strategies to make their clients profitable. Invest time and money in making your clients more profitable; it will be returned to you in spades.
Room for improvement
Improve, improve, improve. It’s just that simple. What separates good firms from great ones is the continuous desire and ability to improve. If you look at the companies that are most successful in turning one-time customers into lifetime clients, maximizing profits, they are always improving by better serving their customers.
How do you improve? Reach out and ask clients. Post a client survey on line or e-mail one to a client. If you ask your clients how to improve, they’ll share a variety of ways. Don’t forget that your people can offer excellent improvement suggestions.
One last but critical point: When you increase your business with existing clients, you significantly increase your profitability because you’ve already paid the cost to obtain the client. The added money from sales goes right to the bottom line.
Are you performing at your best? How much are you leaving on the table? Call one client today and ask the above questions and apply the strategies. You may be surprised by the results.