What is the purpose of a business? Every time I ask this question during a business seminar, the immediate answer that I get back is, “To make a profit.”
But this answer is wrong. The purpose of a business is to create and keep a customer. If a business successfully creates and keeps customers in a cost-effective way, it will make a profit while continuing to survive and thrive. If, for any reason, a business fails to attract or sustain a sufficient number of customers, it will experience losses. Too many losses will lead to the demise of the enterprise.
According to Dun and Bradstreet, the single, most important reason for the failure of businesses in America is lack of sales. And, of course, this refers to resales as well as initial sales.
So your company’s job is to create and keep a customer, and your job is exactly the same. Remember, no matter what your official title is, you are a salesperson for yourself and your company. And the best way to increase your value as a salesperson is to build your customer base. The two most important words to keep in mind in developing a successful customer base are Positioning and Differentiation.
Positioning refers to the way your customers think and talk about you and your company when you are not there. The position that you hold in the customer’s mind determines all of his reactions and interactions with you. Your position determines whether or not your customer buys, whether he buys again and whether he refers others to you. Everything that you do with regard to your customer affects the way your customer thinks about you.
Differentiation refers to your ability to separate yourself and your product or service from that of your competitors. And it is the key to building and maintaining a competitive advantage. This is the advantage that you and your company have over your competitors in the same marketplace the unique and special benefits that no one else can give your customer.
There are three keys to keeping customers for life: relationship selling, partnering for profit, and consultative selling. These are all methods for differentiating yourself from anyone else who is offering the same product or service. They are ways to get customers and keep them. I will explain each of these in detail.
Relationship Selling is the core of all modern selling strategies. Your ability to develop and maintain long-term customer relationships is the foundation for your success as a salesperson and your success in business.
For your customer, a buying decision usually means a decision to enter into a long-term relationship with you and your company. It is very much like a “business marriage.” Before the customer decides to buy, he can take you or leave you.
He doesn’t need you or your company. He has a variety of options and choices open to him, including not buying anything at all. But when your customer makes a decision to buy from you, he becomes dependent on you. And since he has probably had bad buying experiences in the past, he is very uneasy and uncertain about getting into this kind of dependency relationship.
What if you let this customer down? What if your product does not work as you promised? What if you don’t service it and support it as you promised? What if it breaks down and he can’t get it replaced? These are real dilemmas that go through the mind of every customer when it comes time to make the critical buying decision.
Because of the complexity of most products and services today, especially high-tech products, the relationship is actually more important than the product.
The customer doesn’t know the ingredients or components of your product, or how your company functions, or how he will be treated after he has given you his money, but he can make an assessment about you and about the relationship that has developed between the two of you over the course of the selling process. So in reality, the customer’s decision is based on the fact that he has come to trust you and believe in what you say. In many cases, the quality of your relationship with the customer is the competitive advantage that enables you to edge out others who may have similar products and services.
The single biggest mistake that causes salespeople to lose customers is taking those customers for granted. Almost 70 percent of customers who walked away from their existing suppliers later replied that they made the change primarily because of a lack of attention from the company.
Beyond relationship selling, the second key to keeping customers for life is the “partnering for profit” approach to business sales. When you deal with a businessperson, you can be sure of one thing: that person thinks about his business day and night. It is very close to him. It is dear to his heart. And if you come in and talk to him and ask him questions about his business, looking for ways to help him run his business better, the customer is going to warm up to you and want to be associated with you and your company.
As a partner, you should always be looking to help your customer to cut costs and improve results in his or her area of responsibility. You should look for ways to help your customer in non-business areas as well. You should position yourself as someone who cares more about the success of your customer than anything else, even more than you care about selling your product or service. This approach to partnering in profit with your customer is a key way to differentiate yourself and to keep your customer for the indefinite future.
There is a principle of reciprocity in business that is extremely powerful. It is simply this: If you do something nice for someone else, they will feel obligated to do something nice for you. You should be looking for opportunities to go the extra mile, to do more than you are paid for, to put in more than you take out. By extending yourself, you improve your positioning in the customer’s mind and increasingly differentiate yourself and your company from your competitors who are after the same business. If you do this long enough and strong enough, you will eventually develop the partnership to the point where your competitors don’t have a chance against you.
The third part of keeping customers for life is the consulting approach to your customer, or what is called consultative selling. When you position yourself as a consultant, you are really positioning yourself to serve your customer as a problem solver. Instead of trying to sell something to your customer, you concentrate all of your efforts and attention on helping your customer solve his problems, achieve his goals, or satisfy his needs. You ask excellent questions that help your customer think through his situation in greater depth. And you listen carefully to the answers, knowing that listening builds trust.
When customers are asked why they decided to buy from a particular salesperson or company, they invariably give these reasons: the reputation of the company, the level of service and support that the company offers, the reliability of the company and the salesperson, the responsiveness of the organization to complaints and requests, and the quality of the individual salesperson with whom they have been dealing. Price ranks at number seven or eight, if it comes up at all in the surveys. This is important for you to know because it is amazing how many salespeople get sidetracked into negotiating on the basis of price and then they can’t understand why they failed to get the sale.
84 percent of all sales in America originate from the recommendations of satisfied customers. A referral to a new customer is worth ten times more than a cold call. And it is 16 times easier to sell a satisfied customer something new than it is to sell something to a brand new prospect. In the final analysis, dedicating yourself to serving your customers in such a way that you keep them for life is one of the smartest and most profitable things that you can ever do.
About The Author:
Brian Tracy is legendary in sales, addressing more than 250,000 men and women each year on the subjects of management, leadership, and sales effectiveness. He has produced more than 300 audio/video programs and has written 36 books, including his just-released books “TurboStrategy” and “Change Your Thinking, Change Your Life.” He can be reached at (858) 481-2977 or http://www.briantracy.com