Nurturing greater Customer Lifetime Value, one conversation at a time
From all reports, we are experiencing a ‘retail recession’ and figures show that consumer confidence is plateauing. So now, more than ever, maintaining a healthy flow of sales is a matter of survival.
It is well known that the greatest source of new business and sales you have is your existing customer base; they represent a rich vein of gold which is so often left unmined. But out of desperation, many sales teams are missing out on a treasure trove by focusing on the quick sale and customer churn. This means the customer is seen as a quick ‘means to an end’ – a commodity rather than an asset. But what if the sales teams view each and every customer in terms of their total, ongoing potential, and focuses on going the extra mile to nurture them for the long term?
A happy customer is a repeat customer, sometimes a life-long customer. So, how can you create happy, returning customers with every sales opportunity? By applying a few simple rules to the process and looking beyond the initial sale, longer term income and repeat business can be generated and maintained.
These simple steps are:
- Provide customers with excellent, personalised service all the way through the sales process.
- Talk to your customers and provide them with extended information on the product and how it will work for their specific needs.
- Follow up after the sale, initially within days, and then via newsletter or other communication.
- Apply the best technology to support your sales agents when they speak to customers, such as a sophisticated telephony system like Natterbox that seamlessly integrates with your CRM system.
- Listen to your customer’s feedback and encourage your satisfied customers to write reviews.
A good example of how this works is a scenario I came upon recently. A keen photographer was looking for a semi-professional, high-end camera and researched different retailers to compare prices. Each retailer had a similar price and sales experience, until the last retailer. The difference was the salesperson spoke to him on the phone and asked lots of questions about his hobby, what other equipment he had, which features were most important and finally offered to send a pack of information to his email address (capturing all this information for future follow up opportunities). While the price was slightly higher than the other retailers, the friendly conversation and extra time taken made the photographer feel valued and understood. He purchased the camera from the friendly salesperson and became a loyal customer for many years as his passion for photography grew.
This long-term brand loyalty is known as ‘Lifetime Customer Value’. If your business has lots of repeat business, you’ll understand this idea well. It’s no coincidence that companies that invest and excel at providing both pre- and after-sales customer service are also the companies with higher lifetime customer value.
But, the perennial question remains, how to attract your customers? Do you offer them a great deal or a big discount offer? Do you advertise or attract their attention with an impressive (and costly) campaign? Do you conduct market research to understand and analyse their needs and preferences?
Most businesses use a combination of some or all these sales and marketing initiatives. Depending on the success of these strategies, attracting one customer can be very costly and the net profit from the first sale is often small.
Yet, if you keep these customers coming back with good customer service and minimal sales and marketing cost, the value increases and your initial investment yields long term dividends. A happy, loyal customer, like the photographer, will be more inclined to buy again and again. They may even recommend your business or brand to others, increasing their value exponentially.
Organisations must talk with their customers, first to ensure they are satisfied and second to offer any support needed. These conversations may take time and resources, empathy and understanding, yet are a much more cost-effective way to retain customers, generate future sales opportunities and build loyalty.
This process of nurturing an ongoing valuable relationship with customers, grows your business and sales revenue, one conversation at a time.
Charles Heunemann is Managing Director, VP Asia Pacific of Natterbox Limited Australia