A direct sale to a commercial customer today costs more than $400 in terms of time, travel, advertising, lead generation, and other expenses. Acquiring a customer at this cost can put a company out of business unless that customer buys again and again.
The best salespeople and the best companies implement strategies to acquire customers and to keep them for life. Your goal must be to develop long-term customer relationships and then hold on to them in the face of ever more aggressive competition.
When you install a customer acquisition and retention strategy, you do more to build and maintain long-term customer relationships than ever before. By continually thinking in terms of “customers for life,” your success in sales will be assured.
The first sale with any customer is always the hardest and most expensive. You can get the first sale with discounts, deceit, or bonus offers. But it is the second sale that is the most important. The second sale is the proof that you have delivered on the promises you made during the first sale.
In reality, you actually go out each day and you sell your promises to people in exchange for their money. You promise that your product or service will give them certain benefits that they are not currently enjoying. When they come back and buy from you again, they are putting their stamp of approval on your offerings and confirming that you did deliver on your promises.
Resales to satisfied customers are ten times easier than new sales to new customers. A resale only requires one-tenth of the time and effort to achieve. This is why most successful companies measure their success by how often their customers buy again.
A referral from a satisfied customer is fifteen times easier to sell to than a cold call. Selling to a referral requires only one-fifteenth of the time, cost, and effort to make. In fact, if you have a good referral, the sale is 90 percent made before you walk in the door.
Once you have made the sale and the customer is happy, develop a “golden chain of referrals” by asking everyone to refer you to other interested prospects. Ask confidently. Ask expectantly. Ask courteously. But always ask customers and even noncustomers if they can refer someone else to you.
When asking people for a referral, assure them that you will put no pressure on the person whose name they are providing. People are hesitant about sharing referrals until they are convinced that the friend or associate that they are referring will not be unhappy or angry with them for giving you their name.
The most powerful method for you to generate referrals in today’s competitive marketplace is by triggering word-of-mouth on the part of your happy customers. Your aim is to make your customers part of your sales force by getting them to actually sell for you when they talk to other prospective customers. The way that you motivate your customers to sell for you is by giving them outstanding customer service.
The most important element of outstanding customer service is always speed. Speedy response to questions, concerns, and inquiries is a key measure of how many referrals you are likely to get. Fast action on complaints is vital. Regular follow-up and continuous customer care are essential tools for getting referrals.
Practice the golden rule of selling: Serve your customers the way you would like your suppliers to serve you if you were a customer. Serve your customers the way you would serve your spouse, your mother, or your closest friend. Go the extra mile. Always do more than is expected.
Fred Reichheld of Bain & Company studied the elements of excellent customer service for many years before finally concluding that there was one single question that was more indicative of customer satisfaction and referral business than any other single question.
He called it the ultimate question: “Based on your experience with us, would you recommend us to others?”
The willingness of a customer to recommend you to others is the highest level of customer satisfaction. Very often, if you form a good relationship with noncustomers, they will like and trust you so much that they will recommend you to others even if they do not buy themselves.
At the end of the sales conversation, you can ask this question: “On a scale of one to ten, would you recommend us to others?”
Of course, your goal is to get a ten. This means that this customer will become a “raving fan.” He will become a customer advocate. He will tell all of his friends to buy from you as well.
But what if you receive a grade of less than ten—say, a seven or eight? You say, “Thank you for your answer,” then immediately ask, “What would we have to do to earn a ten from you next time?”
Keep asking your customers, “How are we doing?” and “How could we do better next time?” The highest-paid and most successful salespeople are those who develop a book of business—a series of satisfied customers who buy from them again and again, provide faster and easier sales, are less price sensitive, and form the basis for the growth of any business. This is your goal as well.
Develop a customer sales and service strategy that enables you to get and keep customers for life.
This customer service approach does not happen by accident. It requires careful planning, discussion, and training of everyone who deals with your customers. All successful salespeople and businesses are known for how well they treat their customers. This must be your goal always.
1. What one action can you take with every customer and prospective customer that will cause them to want to refer other prospects to you?
2. Determine one action or behavior on the part of anyone in your company that might reduce customer satisfaction and referral business. How could you eliminate it, and how fast?