TITLE SEARCH

Who Owns the Customer?

About a third of the business owners I know will ask me if this story is about their company. I’ll tell all of them it’s about somebody else, but the fact that they have to ask is a good indicator that the problem is theirs, as well.

When you spend a lot of time talking to customers about their relationships with client companies, you come up against a significant issue that most companies ignore at their peril. That issue is the lack of connection between the company and its customers.

Frequently, it turns out, the strongest bond that links seller and buyer is Jane in the production department or Roger in shipping. Much too frequently, the account is owned by Abner, the salesman who sold the account three years ago and is continuing to draw commissions at the same rate as on day one. Abner stopped being a salesman two years ago and now he is, in fact, the most overpaid customer service rep in the world.

Every customer worth keeping is inundated with calls from competitors who offer to provide the same value for less money. It’s great if the customer’s close relationship with an employee is the tipping point that works to assure retention, but the company is at risk if that employee leaves.

Take Abner, our non-selling salesman. In the name of customer service, he has tied the customer to him and he protects his turf aggressively. He assures the customer he is the only person really looking out for them and he will make sure the other employees toe the line. Many business owners are truly afraid to confront their Abners, lest Abner leave and take HIS ACCOUNTS with him.

Non-competes and non-solicitation agreements can help protect a company, but often at a cost. If the employee owns the customer, that customer can be lost even if a non-compete is enforced effectively. (Based on several true stories in my own career.)

Enforcing agreements after the fact is less productive than ensuring that the customer is linked to more than one person—and to the company itself. Getting from here to success is a very direct and commonsense process.

First, determine which customers are on the A-List. Whatever keeps an A-List customer today will keep other A-List customers in the future. There’s not much sense to building a retention plan for clients you’d like to fire in the future.

Second, find out who owns their relationships.  This requires a conversation with the customer, of course, and a discussion that needs some nuance and finesse. With proper questions and follow-up, the patterns will emerge.

Third, look at the patterns to identify values and traps. Are customer relationships tied to people, departments, customer types or products? Do company policies actually encourage customers to link to just one employee and forsake all others?

Fourth, use the insights gained from this exercise to attach new tentacles to the customer. Retention will benefit from a larger number of links, even if each link is represented by an employee. A new tentacle could take the form of a monthly check-up call from a second source in the company, a “helpful hints” email that offers real savings or some other means. The new tentacles do not have to incorporate expensive new initiatives, but this is one of those situations where less is less and more is better.

_______________________________________

As always, we’re happy to discuss any of the points raised in this and other posts, and to help you benefit from increased focus on the matters that matter. Reach us by emailing Michael@quadrantfivefocus.com or calling 312 582 4470.