All of sales and marketing is obsessed with winning the next customer. Meanwhile, many businesses are hemorrhaging as many as one-in-four customers annually.

The simple message of delivering on promises and keeping existing customers is a familiar one for most managers, yet issues of customer service and satisfaction receive only lip service. Organizations need to tackle the apathy and complacency that surrounds their relationship with their existing base of clients.

The new rules of repeat sales are as follows:

1.   Fire half your sales force. The sad reality is that if companies got better at keeping their existing customers they could meet their growth targets with much fewer salespeople. If they applied the same sophistication to keeping customers as to winning new ones they would be much better off.

2.   Forget customer satisfaction. Marketing slogans love to talk about the importance of customer service and customer satisfaction, however it is only a red herring. Buyers have moved beyond satisfaction as the basis for selecting suppliers — they want suppliers that impact in a tangible way on the performance of their business.

3.   Forget responding to customer needs. Too many suppliers are playing catch-up in terms of changing customer needs and priorities. They are waiting for customers to tell them what they want, while competing suppliers are tempting them with innovative solutions, ideas and technologies.

4.   Forget account management. Account management is crawling rather than running in many companies, with basic elements, such as key account reviews and plans, severely lacking. Yet, remedying the deficiencies in account management is not going to be enough. Sellers need to develop, not just manage their accounts.

5.   Forget preferred supplier status. Suppliers are a dime a dozen in today’s competitive market space. The real test is to become so important to the customer as to be indispensable. That means to transition from supplier to strategic partner.

6.   Forget up-selling. Naturally, account reviews focus on selling more to the customer, however they neglect the basis upon which the next sale is predicated. That is the commitment of the supplier to meeting the customer’s needs. To meet sales targets suppliers need to show their customers how they can help them meet their own targets.

7.   Forget closing and moving on. Longer sales cycles mean that once the deal is closed the seller is under increasing pressure to find and close the next deal. However, the seller must stay involved post sale in order to ensure success.

8.   Forget marketing yourself. A testimonial or referral from a customer is worth dozens of adds, cold calls and marketing brochures. Yet, this powerful form of marketing is often overlooked by vendors.

Today I witnessed another example of how the revolution in organisational buying (what we call the buying revolution) is challenging salespeople to their very core.

But, if an account review does not look for a win-win in terms of looking to help the buyer more and in return sell more, then it is starting from the wrong place and the very health of the client relationship may be under threat.

You probably believe that customer satisfaction is very important.

However it is becoming increasingly clear that it is not. The problem is that what customers say and how they act with customer satisfaction surveys (although important) being a poor predicator of buying behavior or customer loyalty.

So, the pursuit of customer satisfaction as the end goal of sales and marketing is misguided. Satisfaction is a fluffy and wooly concept that misses the whole point of the buyer-seller relationship. It is not the satisfaction of the buyer that matters, but the results you have helped them achieve.

Asking your clients if they are satisfied is simply the wrong question. Sellers must measure themselves on the metrics used by their customers.

So instead of saying 67% of our customers are satisfied or very satisfied, sellers should be able to say something like:
• 75% of our customers saved more than they expected using our solutions, with the average saving equating to 5% of total project costs.
• 1.25% was the improvement of margins resulting from the implementation of our solutions.
• Our customers have improved stock accuracy levels by 20% since the implementation of our solutions, with the net bottom line impact of 2%.

Sales and marketing has long suffered from a split personality. This is often described in terms of the hunter and farmer.

The hunter persona generally typifies the traditional view of the sales professional that aggressively seeks out customers in a proactive manner and rules supreme when there is buoyant growth in the economy.

The farmer on the other hand is a more subordinate personality compared to the dominant hunter. The farmer’s focus is on keeping and growing existing customers and is often undervalued within organizations. However, when times get tough farmers often become the savior of the sales department.

Most sales organizations are better at hunting than farming. This is generally because this has been where most emphasis has been placed. In the past it has not been a problem. Indeed, for the greater part of a decade ‘hunters’ have been celebrated, while their ‘farmer’ colleagues have often been berated for not generating enough new business.

With new customers now in scarce supply, the hunter often returns bloodied and empty handed. This is at a time when organizations are battling to maintain their existing client base as customer poaching reaches new levels. Those organizations that are great hunters, but poor farmers are struggling to meet their numbers.

Ensuring repeat sales and developing a long-term relationship with clients revolves around one simple but rarely completed equation — Promise = Performance.
While getting the first sale involves making promises, securing the second sale requires keeping them. Salespeople often feel they will lose a sale if they don’t promise enough, but often lose out on subsequent sales by promising too much.
The ultimate measure of success for any organization is its ability to develop long-term customer relationships and repeat business. High rates of growth and profitability are unsustainable unless organizations can apply the same sophistication and skill to keeping existing customers as finding new ones. But the ability to nurture clients and grow existing business is one of the biggest failings of sellers, even though it requires half the salespeople, half the sales calls and half the proposals.
The equation Promise = Performance not only focuses organizations on delivering results and generating repeat sales, it also enables them to seek referrals from clients — one of the most effective ways to generate leads but also one of the most underutilized (a point we will cover later).
In order to meet a repeat sales target sellers need to redirect their efforts from helping the customer to buy, to helping the customer succeed. Thus, the role of a salesperson changes from making promises to keeping promises.
While this might sound easy, organizations are often complacent when it comes to their existing client base. Research highlights only one-quarter of promises made by vendors are being kept. This is good news for those taking on big name vendors, because as a result one-in-five managers are willing to consider changing from their existing supplier.

With lengthening sales cycles, the salesperson is likely to be under pressure once the deal has been signed to move on to close the next opportunity.

However, the danger is that those involved in the negotiation have moved on at a time when buyer anticipation and anxiety is at its greatest.

Buyers often complain the attention, enthusiasm and commitment shown by sellers during the sales process wanes once the order is signed. Instead of the seller chasing the buyer, the situation can be quickly reversed. This happens all too often when the salesperson fails to successfully pass the baton to their colleagues.

Just as the salesperson thinks their job is done, another vital phase of the sales process is just about to begin — implementation. So it makes sense that the lead sales people handhold and support the customer at the early stages of a project.

The salesperson should never shirk the responsibility of ensuring project success. However, it is essential that they hand over the day-to-day project management and delivery to the experts. Buyer confidence depends on a smooth transition, so it is crucial that the person who takes over the day-to-day management of the project has been involved during the sales process. It is also really important for the salesperson to maintain contact with their delivery team and the buyer’s implementation team. Salespeople cement and deepen the relationship by staying in touch after the sale.

The first sale involves making promises, while the repeat sale requires keeping them.  This is at the core of why many customers are lost.  Promises made and expectations set during the sale have not been meet.

Customers are lost when the promise is greater than the product, or the performance.  There are lots of words to describe when this happens:

• Product Quality
• Service Quality
• Delivery Problems
• Poor Customer Service / After-Sales Support
• Poor Account Management
• Poor Communication
• Project Management Failures

The implication for sellers is that they must manage the expectations, manage the performance and continually communicate the benefits achieved by customers post sale.

As far as buyers are concerned must suppliers are expendable.  This is a real problem in tough markets where there are many suppliers chasing few customers.  That means your customers are at risk of being lured by the competing promises of other vendors.

So, keeping the promises you made last quarter or last year may not be enough.  It is vital that sellers must be proactive, rather than reactive in terms of meeting the changing needs of their key customers.

The reality is that organizations are increasingly rigorous in evaluating vendors. Purchasing departments in some cases require that a vendor assessment is completed employing a standard template as follows:

Buyers tell us, however, they are rarely asked by suppliers about such evaluation procedures. That means suppliers are making assumptions about how they are being evaluated.

So, it makes sense for sellers to get direct feedback on the evaluation process. This has a benefit for the buyer too, with those buying organizations adopting best practice being anxious to involve suppliers in the conduct of such reviews.

The key activities associated with account management are listed and explained below. Are they being undertaken within your organisation?

(i) Sales and Profitability Analysis

Classifying accounts based on revenue, profit performance and potential by employing activity-based accounting methods

(ii) Client Feedback

Gathering feedback from clients in a formal, systematic and documented manner

(iii) Internal Reviews

Bringing together the project teams for each account in order to review performance, opportunities and actions

(iv) Client-Side Reviews

Undertaking reviews with clients at their premises in order to assess performance, identify any issues and understand changing priorities and directions

(v) Categorization of Accounts

Categorizing accounts in respect of performance and potential

(vi) Policies/Targets

Setting targets with regard to service levels, responsiveness and performance for each individual customer category

(vii) Key Account Plans

Developing a plan for each key account that sets out how to grow account revenue and profitability, as well as how to deepen the client relationship and deliver greater value and service

(viii) Revenue and Profitability Targets

Setting and revising targets for revenue, as well as for profits from existing customers; this also incorporates innovations in service/delivery, with a view towards increasing customer value

(ix) CRM System

Effectively employing a CRM system or sales database to store customer data and manage customer relationships