Best Practices for Improving the Profitability of Customer Relationships

Your existing client base is your most valuable asset, and if managed correctly, can be a source of profitable revenue growth for years to come.

The key to building the kind of great relationships with your customers that inundate you with repeat business, cross-sell/up-sell opportunities, referrals, and enthusiastic references is trust - a difficult to attain, easy to lose quality built on a continuous series of valuable interactions with your company.

There are two main reasons why organizations that do an excellent job on an initial engagement fail to develop and maintain high levels of trust with their clients: 1) a lack of communication and 2) a lack of value in their communications. We'll look at each separately below.

Issue 1: Lack of Communication

Many organizations spend significant resources acquiring new clients and making sure they're satisfied with the outcome of the initial engagement, but then fail to follow-up with them on a consistent, regular schedule. As a result, when the client or one of her peers develops a new need that your organization can also help solve, you're not top of mind and the opportunity is missed.

Not only is this is a loss of profitable revenue, but it may also provide a competitor with a toe-hold in one of your key accounts.

Issue 2: Lack of Value in Communications

Some organizations recognize the need for consistent follow-up, but fail to ensure the follow-up interactions deliver meaningful value to the client. Examples of this include email newsletters with company-centered content, webinars that are really product-pitches, and sales reps that are always just "checking in".

These types of interactions provide no new insight, no helpful guidance, and no value to the client. While your clients may pay attention the first few touch points, your slowly but surely eroding their patience and trust.

The Solution: Continuous Nurturing

Even after you have acquired a new client you should continue to treat them as though they were a new lead. This means having your marketing department nurture them with relevant content in a timely manner, and having your salespeople well-prepared for each call to ensure they bring new insights and value to the interaction.

The diagram above illustrates how continuous nurturing works. Existing customers are sent back to marketing for active nurturing, and once a new opportunity within the account is identified, the client is sent to sales for follow-up. This allows you to leverage your marketing department's ability to consistently deliver high-quality content in a cost-effective manner, and sales only engages the client when they have a valid business reason for doing so.

Although continuous nurturing is straightforward at a conceptual level, it requires strong coordination between marketing, sales, and service to work effectively.  Responsibilities need to be well-defined, and it should be clear when responsibility for an account moves from one department to another.  A well implemented CRM system that provides a 360 view of your clients and facilitates easy transfer of responsibility is key to ensuring it is successful.  
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