Many businesses emphasize the need to obtain new business at the risk of ignoring and neglecting existing clients. Granted, maintaining clients is not as glamorous from a marketing perspective as landing the big new client, but every bit as necessary. If you don’t believe me, do an analysis on the time involved and the cost of replacing a client.
When you’ve determined that exact number, factor in the damage an unhappy customer is doing to your organization. Your former client went to a competitor, and that competitor knows exactly why they left. That competitor’s sales force is now repeating that story to every one of your clients who will listen. Ever since we became a nation that buys pretty much on price, client loyalty is rapidly becoming an artifact of the last century.
Many companies “de-incentivize” their marketing and sales force in this critical behavior by either drastically reducing or totally eliminating the commissions they pay on existing accounts. This short-sided move sets your clients up to be poached by your competitors.
Crafting a fair and equitable sales compensation and commission plan is right up there in complexity with the algorithms that fire an airbag in a car.
Now back to what got me on this tirade. We were long time clients (17 years) of a satellite T.V. provider. The service they provided was decent and the pricing was at best okay, not bad enough to make us consider a change. What that meant from a business perspective is that for 204 consecutive months this company billed our credit card on auto-pay and could count on that revenue being there.
One day our remote control device died, after 17 years. My wife, who has the patience of Job, called their customer service department and after being bounced around for a while was told she would have to “pay” for a new remote. When she told the customer service rep that was unacceptable, ploy #2 became – we will provide you with a new remote BUT you have to take out an $8.68/month insurance policy on it. This was the straw that broke the camel’s back. We went and selected a new provider and have never looked back. When anybody asks me about my old provider, I always tell him or her about my experience and how I could never recommend this company to anyone.
Now, here is the funny part, and business leaders, pay close attention: we get 2-3 pieces of mail from them every week with what are basically form letters that say “let’s kiss and make up.” I kid you not. What they are spending now after the horse is out of the barn is just nuts. Is anybody so shallow they would buy this tactic? So, what are the takeaways here? Treat your clients with the respect they deserve, throw them a bone every once in a while so they know you appreciate them, and don’t forget to thank them for their business.