After a decade of buoyant demand, organizations are facing a battle on two fronts – to protect and grow. That is to protect existing customer revenues from being poached by competitors, while seeking out any new business that exists in the marketplace.
Your Competitors Are Circling Your Customers:
Clearly the challenge of finding new customers in a declining market is greater, but so too are the temptations for existing customers to stray.
Salespeople are increasingly wandering into new territories in search of whatever business is to be found. In fact one buyer told us recently that he was now receiving up to 6 or 7 sales calls each day and the majority of these were from suppliers that had never previously contacted his company.
So it is no wonder that Sales Managers are complaining about new competitors circulating around their hard won customers, luring them with discounted prices. For buyers facing mounting cost pressure, the temptation can be too great to resist.
How to Protect Your Customers:
Here are 8 strategies that sales managers are employing to protect their customers from increased competition:
1. Stop managing key accounts, develop them instead.
The reality is that your relationship with a customer cannot remain static, in spite of changes in personnel, budgets, competition, business priorities, and so on. That means each customer account is either moving forwards, of backwards.
You have to keep moving those accounts that are important along - proactively nurturing and growing them. Too often the term harvesting is used in respect of existing accounts, however the hunter mindset is required to maintain and grow existing business. This requires a minset change - one that recognises that the sales job is not over when the order is won.
This is the ideal time to renew and reinvigorate your account management (we much prefer the term account development) going back to basics to focus on internal and client side reviews, key account plans, relationship building, etc.
2. Understand and reflect changing buying priorities.
Your customer's business and its priorities are radically different to what they were 6, 10, or 12 months ago. Their focus is likely to be more short term, that is pressing problem and a short term payback. Customers also likely to be looking to adopt a leaner, more flexible and more innovative approach to all aspects of their business. It is important that the way your company does business reflects these changes.
3. Help your customer through the downturn. Almost universally customers are facing tighter budgets, pressure on costs and demands for increased efficiency. As a supplier, how can your services and solutions aid the customer in these areas? For example, with your system now installed on a customer site you are likely to have a much deeper understanding of the extent of user adoption, the impact on related business processes, underutilised system functionality, etc. Use this information to show the customer how to squeeze further efficiencies and costs.
4. Communicate the value. Your customer is rightly asking ‘what have you done for me lately’, thus reminding what you are doing is key.
Has the customer achieved the expected benefits of your services, or solutions? Does the customer even know the answer to this question? Well, herein lies great potential to strengthen and protect your relationship with your customer.
It is vitally important to measure the impact of your solution on the customer's business. The supplier that finds that a customer is only getting 80% of the anticipated benefits and knows how that figure can be improved has still got a lot of extra value to add.
This is true of almost any supplier – there opportunities to add value that are often overlooked. These may include; showing the customer how to generate a different type of reporting from the system, providing advanced training to users, holding periodic project management meetings, sharing insights from other customers, or research regarding market, or technology trends, etc.
5. Innovate continuously. It is often said that familiarly breads contempt, or at least complacency, and that is something that you want to avoid with your customers. Because your competitors are likely to be approaching your customers promising something different, so it is important that you also continuously innovate and differentiate in terms of what you are providing.
6. Don't Settle for Just Being A Supplier
In respect of those customers that are strategically important to your business, you must work to deepen the relationship and move along the continuum from supplier to strategic partner. Now if you are simply supplying low margin products, or services in a transaction-like manner, this is not relevant. However, if your objective is to develop a long term profitable and secure relationship, then developing two way inter dependence and cooperation will be your goal. That will require a greater levels of mutual communication, interaction, understanding and trust..
7. Make switching more difficult – that means seeking to make your customer more dependent on you, or to tie the customer to your solution by means of your terms, the propriety nature of the technology employed, the level of integration of your solution with the customer's other systems, or processes, or simply great service and strong relationships.
8. Be proactive. Plan ahead with your key accounts, for example pre-empt price renegotiations, changes in the customers strategy, or personnel, etc. Too often suppliers are taken off guard by changes in a customer's business, or requirements.
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