There are a lot of business ‘truths’ that just make sense to us intuitively, because we’re all customers too.
We expect discounts as buying volumes increase and we expect more personal service from a smaller business.
We intuitively understand that businesses that value us as customers are nicer to buy from. And when those businesses treat us with extra care, we are more likely to buy even more from them.
Which is why it’s so strange that all businesses don’t make this a priority when serving their customers.
Service = More Sales
The best business brains out there understand the connection between marketing, sales and service. They intuitively understand what makes customers buy more. They do all those things that I am always talking about (they get to know their customers personally, they ask the questions that matter, they solve their customers’ problems, sometimes before those customers even realize they have a problem) AND they understand the lifetime value of their customers. Without ever breaking out a pencil and paper.
Customer Lifetime Value is Like Cost Per Wear
This is one area in which my two interests (fashion and business) intersect: customer lifetime value is a little bit like cost per wear, but from the opposite viewpoint. When deciding whether to purchase an expensive item of clothing, it’s wise to consider the cost per wear. Sometimes what seems out of reach is really a bargain when you can wear it regularly and with many of the things you already own.
Similarly, understanding your customer lifetime value becomes important when determining how to direct your account management activities and budget. One of those business truths is that customers who have already bought from you are much more likely to buy from you again. Hello increased profit per transaction!
Thinking like a small business owner who intuitively understands the lifetime value of her customer is akin to evaluating the cost per wear of that expensive suede coat. In both cases you need to think longer term. In both cases you need to think about engagement. And in both cases you need to recognize the actions you need to take yourself to make the ROI work out more favorably.
HOW do you do it?
The smart money is on providing OUTSTANDING service, followed up with the kind of continued relationship building that leads to more new business from clients who have already bought from you.
How do you do THAT?
By training your client facing team in basic sales skills. Sure, they need to know how to deliver what the client has already purchased, in an exceptional way. But what would happen if they were taught how to look for additional opportunities? And how to ask the kinds of questions that would expose those opportunities? Doesn’t that sound like one of those sought after business situations: more new business for little investment, better client relationships that lead to even more new business AND referrals to entirely new businesses?