It’s inevitable that competitors are going to try and steal your best customers. In fact, they’re probably already approaching your largest, most valuable customers right now. So, what’s your customer retention strategy? Hint: it should be data-driven and come from smart applications that combine the power of automation, analytics and data science to provide real-time guidance on your customers and their buying patterns. Russ Chadinha, Director of Product Marketing at PROS, has outlined 5 tips on how to keep your competitors at bay:
1. Prepare your customer retention strategy: When competitors make a play for your customer’s business, that’s no time to figure out what to do. Your customer retention strategy should be ready to spring into action. While company leadership always has retention on its radar, step-by-step proactive planning needs to be a priority.
Build in formal competencies for retention and create a plan for your largest accounts that includes scheduling quarterly reviews with the customer. Reviews tend to have an overly historical perspective, focusing on what’s happened for 90% of the time, and spending only 10% on what’s next. If you change that mix to 40% historical review and 60% looking ahead, you’ll ensure that the customer is counting on your services when planning for the future. When you have that kind of trusted partner relationship, there’s much less room for a competitor to squeeze in. Another element to include in your retention plan is proactively offering customers new opportunities for savings, and new products and technologies. While they may decline these offers, you’ve shown your commitment to their company’s future and sincere interest in their success.
You might also consider a “go-to-market” support program that includes top customers in a formal advisory council and involves them in your future product designs. If your customers are entrenched in your design organization and providing guidance, they feel like they’re an important part of the development process and your strategy.
2. Open sales reps’ eyes with data: Data-driven coaching improves your organisation’s sales effectiveness and productivity. When coaching reps on retention, the key is to show them an opportunity for meaningful short-term return when they invest their time with existing customers. First, you need to make sales reps aware of the revenue opportunities within their existing accounts. For this coaching conversation, have data and analytics at the account level, and share it with the sales rep. Start with reviewing the data for their largest customers, and walk them through the product and pricing opportunities in these accounts. Starting with the largest customers gives the rep more motivation to invest their time in pursuing incremental revenue. When you show the rep how much quota they could retire, it’s a big number. Since the rep already has a connection with these customers, these sales conversations are easier to initiate.
3. Sell the value early: When you consistently emphasise the partnership benefits you offer your customer, it prepares them to turn away the competitors who are knocking at the door. By focusing your customers on the value of your products and services, rather than price alone, they’re able to quickly filter out the competition. Make sure the customer explicitly acknowledges that there are real, meaningful benefits to working with you as a supplier, and that these benefits go beyond the products and services you provide. To get that explicit acknowledgement, be sure to consistently communicate those benefits, arm them with data and bring in additional thought leadership. Start with communicating your tangible business impact as part of regular conversations with your customers. You might also want to bring in alliance partners as a way to demonstrate your thought leadership and give them insights into what’s going on in the marketplace.
4. Explain and share the impact of losing customers: Salespeople are generally optimists, and tend to never think about the possibility of losing. But if a rep’s top five customers are responsible for 80% of the revenue they’re bringing in, losing one of those customers is a major setback. When you use data to show them how losing a specific customer could impact quota, it’s often a real eye-opener, and a great way to motivate reps to focus on retention.
5. Establish targets and quotas at the account level: To support your sales team, establish a number that everyone commits to at the account level, and use sales data to show the account size, the impact of losing the account and specific sales targets. When you give reps a clear line of sight as to where their revenue numbers should come from, it allows them to be precise in where they invest their time.
By Russ Chadinha, Director of Product Marketing, PROS