Create a Reason for Your Customers to Stay
October 8, 2019
Editor's Note: This guest post was authored by Julie Thomas, CEO of ValueSelling Associates.
Too often salespeople interact with customers through contract close and then again, a year later, to renew the contract. Landing the big sale is exhilarating but you can’t just run off to close your next deal. Winning the contract is only the beginning of the sales reps’ relationship with the customer. To keep your customers loyal, you need to be available, be a problem solver, and act as a point person for others in the organization. The best sales reps are truly invested in their customers’ success – it’s key to maintaining the relationship post-sale.
Here are five ways to retain customers and prepare for renewals.
#1 Approach Renewals with the Same Rigor as Selling New Clients
The majority of companies commit enormous amounts of resources and effort to winning new clients, yet when it comes to retaining customers, the same amount of time, energy and thoughtfulness are not applied to the sales processes. Research by invesp confirms this, reporting that 44% of companies have a greater focus on acquiring customers, while only 18% focus on retaining customers.
In order to avoid customer acquisition costs, many businesses follow the golden rule of retaining customers and building a loyal relationship with them. Consider these statistics from invesp’s infographic on the value of keeping customers:
- It costs 5 times as much to attract a new customer, than to keep an existing one
- The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%
- Increasing customer retention rates by 5% increases profits by 25% to 95%
#2 Create a Frictionless Experience for Customers
Selling today is a team activity that happens across several departments. A customer’s impression of a company is shaped by multiple touchpoints with employees across the business. This is why it’s essential for companies to use a sales methodology that all customer-facing employees can easily understand and use consistently.
Make sure every department that interacts with the customer after the sale speaks the same language and is part of providing a holistic experience. The handoff between direct sales, inside sales, subject matter experts, and customer service should be seamless.
In many companies, salespeople make promises to prospects, but after the prospect becomes a customer, things change and the team and communication are vastly different. Unfulfilled promises and miscommunication lead to dissatisfied customers, and as a result, long-term customer relationships are lost.
#3 Conduct a Health Check
The ability to renew a contract depends on the salesperson’s ability to build a relationship with the customer. Performing health checks with customers is a great way to check in and see how things are going without selling them anything.
You came to know each other during the initial sales cycle, so now you have an opportunity to strengthen the relationship. Gain rapport with your customers by being yourself and getting to know them. When the customer is comfortable talking with you that puts them at ease talking about their challenges and problems as well as their likes and dislikes of your product. If you don’t know what their issues or complaints are, you can’t fix them. More importantly, if they love your product, you want to know. These conversations can provide early clues into parts of the deal the customer would like to renegotiate.
#4 Set Reminders Ahead of the Renewal Date
The average Global 1000 corporation has over 40,000 active contracts at any given time, which is an indication of how much is going on with large enterprise companies, and how many contracts are in play.
If your company sells ongoing services, such as Software-as-a-Service (SaaS), salespeople can set reminders to renew the annual contract well ahead of the actual renewal date, typically at least 60 days in advance. This will give you plenty of time to work through negotiations and approvals before the contract expires.
#5 Perform Continuous Engagement for Requalification
If your business solves a specific problem (rather than a continual service), you must realize that once that need is met, it’s not a motivator for the next sales cycle. Staying partnered with your customers enables you to discover what problems the customer may have now and what their new needs are.
Use these five approaches as part of the art of keeping your customers. The personal connection you have with customers is key to selling more in the future, because your success as a salesperson is contingent on the success of your customers. Customer retention makes a huge impact on both top-line revenues and bottom-line profits. If your focus is realizing value, rather than just making the sale, you will keep the lines of communication open with your customers in order to anticipate and fill their future needs.
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