It’s common knowledge that the successful preservation of any relationship requires hard work, patience and devotion in order to keep the spark alive. While this Valentine’s Day will doubtless see many focusing on maintaining personal long-term relationships through floods of chocolates, cards and red roses, isn’t it worth asking what companies can do to achieve the same goal with their customers?
Of course, nobody’s suggesting that vendors should stand outside their customers’ houses late at night serenading them or reading poetry. Nonetheless, it’s important to ensure that the flames of passion are fanned, ensuring that customers are willing to commit to something more than a short-term fling.
The recent rise in subscription-based businesses proves that, in today’s volatile business climate, this commitment is more crucial than ever before. In fact, recurring revenue from software and hardware maintenance and support and SaaS subscriptions accounts for between 30- to 40% of a company’s revenue and up to 50% of profit. However, in today’s competitive recurring revenue economy, it’s harder than ever before to get ‘till death do us part’ commitments from customers.
So how do businesses keep the romance alive, and reignite the spark between them and their customers? Here are three tips that should ensure that you and your customers are still together when you’re both old and grey.
1. Recognise Your Faults & Vow To Change
The first step to keeping the customer relationship alive is to acknowledge that you’ve been neglectful in the past, and vow to change how you nurture the customer relationship in the future. It’s okay to admit that new customers hold a certain appeal compared to the customers you’ve already won – the thrill of scoring a new customer makes you feel like you still have ‘game,’ after all.
However, the key is not to marginalise the existing customers you’ve already won in your attempts to flirt with newer, potentially more exciting customers. Therefore, it’s important make a conscious effort to show the love to your current customer base.
2. It’s Good To Talk
Every good relationship relies on effective communication and action. The best way to nurture your customer relationships? Friendly, knowledgeable and most importantly, consistent outreach.
If experience shows us anything, it’s that the that lack of customer outreach is the number one reason why customers don’t renew. With the recurring revenue economy worth an estimated $310bn annually and growing, now’s the time to dedicate resources to customer retention.
As in any relationship, if you only reach out when you need something, you’ll be resented. Of over 200 IT decision makers spoken to in a recent survey, 57% only heard from their vendors at renewal time, if at all. That inattention, coupled with the 42% of customers that take sales calls from their vendors’ competitors at least once per quarter (20% at least once per month), is a recipe for customer churn.
Show your customers that you care about their needs and long-term success; see if they have any questions, problems or concerns. Devoting time to reaching out to customers will pay off handsomely when it comes time to renew.
3. Demonstrate How You Can Grow Together
Now that you’ve ramped up customer outreach, use that line of communication to ensure proper user adoption of your product or service by making certain that your customer is made aware of all of the available capabilities. Understanding the product or service not only increases the likelihood of renewal, but also triggers new opportunities for cross-sell and up-sell.
It’s much easier for a salesperson to encourage the purchase of additional modules if the customer feels he or she has derived full value from the original purchase.
At the end of the day, it’s easy to blame the other party when a relationship breaks down, but don’t forget that it takes two to make a successful relationship. By following these simple guidelines, you might well find out that it’s not too late to take your customer relationship from ‘it’s complicated’ to ‘fully committed’!