Posts Tagged ‘loyal customer’

A Loyal Customer Is Your Revenue Generator

Many small to mid size businesses cannot answer this question:  What is the total value of each loyal customer? For these SMB owners are so busy working on yesterday’s issues and today’s issues, they fail to invest the time on tomorrow’s opportunities.

To calculate this very important number begins by understanding your average revenue per order and knowing the total number of orders per year per customer.  By multiplying these two numbers creates your total revenue opportunities per year for your average customer.

Next take your total revenue opportunities multiplied by the average tenure of your customer and you now have your total value of a loyal customer.

For example, you are a small, locally owned restaurant and the average breakfast meal is $6.00 and your customers visit you 2 times a week or 104 times a year for annual total revenue opportunity of $624.  Your average tenure or lifetime for your customer is 10 years.  Total value of that customer is $6,240.

When that customer stops coming, you have not lost $12 a week, but $6,240.  This is why building loyal customers is so critical to your bottom line.

Here is another real world example. My husband and I go out for dinner usually once a week.  Twice a month we frequented a locally owned restaurant that consistently delivered good food. During one of our visits, my husband visited the men’s facility and observed a cook not washing his hands. Upon returning to the table, he quietly shared with me the incident and we left.

On our way out, my husband took the manager outside and politely explained what had happened.  Even though the manager did try to resolve the problem, we both know that individuals who fail to wash their hands will not change their behaviors.  Impact to that restaurant was easily $25,000 over the course of 10 years because usually once a month another couple joined us.

TAKE ACTION to make sure that everyone from the executive team to the frontline workers understand all points of connection. Demonstrate the financial impact when just one loyal customer is lost because a simple point of connection such as the staff not washing their hands was not maximized.

Share on Facebook

Looking to Be Insulted in All the Wrong Places

Years ago there was a song with these lyrics “Lookin’ for love in all the wrong places.” Today, it appears many are looking to be insulted in all the wrong places.

My husband and I at breakfast talked about how everyone is looking to be insulted especially those in business.  This conversation was prompted by a friend and colleague who was accused of micro-aggression by a millennial female wait staff person.

I wonder how this particular individual would have handle this comment from a loyal customer “I want to to be served by a man.” My sense is she would have been insulted and probably labeled this also micro-aggression.

“Many of today’s younger people are looking to be insulted.”

When I first started my professional adult career in sales, I was one of the firs female inside salespeople in the pipe, valves and fitting industry within Chicagoland area.  I can’t count the number of times I heard a male customer, sometimes with a heavy Irish brogue, tell me “I want to talk to a man.”

Instead of looking to be insulted, I simply transferred the customer to another male salesperson.  No big deal. Usually what happened is the customer would come back to me because I knew more about the subject than the male salesperson.

At this time, the customer was usually embarrassed.  Instead of making him feel worse, I just smiled and asked him “How can I help you?” After all, the goal was to increase sales, not to turn a loyal customer into a disloyal one.

When I started this position, I made an effort to educate myself in areas that many had ignored such as specifications, time of delivery, quality of products and substitutes. This knowledge proved exceptionally beneficial.

Micro-Aggression Really?

How often do we ask to speak to someone who can speak English well and understand English?  By the definition of micro-aggression, we are marginalizing or demonstrating indirect discrimination against non-native English people.

Well, my thought is it’s my money, my time and my customer experience. I want someone who can understand what I am saying and I can likewise understand the other person on the phone.” This is called effective communication, not micro-aggression.

Tight Shorts Anyone?

My husband coined this phrase “tight shorts.”  It means people whose feathers are easily ruffled.  These are the folks looking to be insulted.  They are the first to complain.  They are seeking justification for their beliefs which in many instances are false.

The last place to wear tight shorts is the workplace. My Dad warned me about people and sales. He said to “let it go like water off a duck’s back.”  Those words I still carry with me today.

When Did It Happen?

When did it happen we can’t say anything without someone looking to be insulted or offended?  Are we so fearful, so lacking self confidence, so emotionally unintelligent we must actively seek to be offended, to be insulted?

Maybe it is time to reassess what and how we teach young people to be.  Yes we must look not to offend that is true. However maybe it is also true we must stop looking to be insulted in all the wrong places.

Share on Facebook

Customers Leave People Not Businesses

You work hard to build your SMB.  You make the extra effort to show appreciation to your loyal customers.  And then poof, one of your people, with some poor emotional intelligence destroys what you worked so hard to achieve.

customers-emotional-intelligence

A True Customer Loyalty Story

An entrepreneur recently shared his customer experience about how one restaurant manager destroyed his customer loyalty. He then put that destruction into hard cold cash. This friend had a 40 year plus relationship with this particular upper end restaurant.  He was by all accounts a valued, loyal customer.

In the last eight months, he had given this SMB over $10,500 and he determined yearly expenditures were around $18,000.  Additionally he had booked his annual Christmas party for the another $7,000.  His annual sales at this particular establishment amounted to $25,000.  Even for established restaurants, losing $25,000 in annual sales is a significant hit to the bottom line.

The manager lacked the emotional intelligence to effectively manage his wait staff.  He also failed to recognize the importance of maintaining loyal customers.

Now this entrepreneur will take his business luncheons, business dinners and casual dinning experiences elsewhere.  He will no longer recommend this particular restaurant as he had done hundreds of time in the past. So the $25,000 annual sales from this one loyal customer could easily be doubled or tripled.

SMB owners so often fail to recognize the importance of their managers to effectively manage their people while ensuring loyal patrons stay loyal and employees are treated with respect.  In today’s world, we identify this ability as emotional intelligence.  To mistreat a loyal customer with decades of patronage is unforgivable especially if during all those years there was never an issue with the customer.

There is an old adage about employees leaving managers not businesses. This wisdom should also be applied to customers as well.  People make or break any business from the smallest to the largest.  As a SMB owner the question should be:

Can you afford to lose customers and their referrals because your people are unprepared to handle customer situations?

Schedule a time to speak with Leanne Hoagland-Smith (CLICK HERE) and learn how to build emotional intelligence into your employees.

Share on Facebook

One Sales Call Does Not Do It All

Wouldn’t it be great that with one sales call the customer would buy and become a loyal customer for life?  We all know selling in the B2B marketplace and sometimes in the B2C marketplace takes more than one call.

sales-callSo if we as salespeople know that then why do so many in sales stop at one, two or even three sales calls?

44% of salespeople give up after one follow-up  (Source: Scripted)

If people buy from people they know and trust, then how can one contact ever be enough?

The average salesperson makes two attempts to reach a prospect. (Source: Sirius Decisions)

A sales call must be purposeful, planned and delivered.  Top sales performers know they must assess their sales leads or prospects.  They they may invest some time gaining clarity about the market place trends, the industry, the company and the individual.  This clarity is also the essence of the fact finding sales conversations. Finally, they must execute the sales call and then during the sales conversation to “close the sale” or what I prefer to “earn the sale.”

80% of sales require 5 follow-up phone calls after the meeting.   (Source: The Marketing Donut)

When those in sales recognize one sales call does not do it all, they can plan for those 5 follow-up contacts through their nurture marketing plan.  This is where a good CRM tool such as Pipeliner CRM can help.

Even after the numerous follow-ups and the sale is now achieved, this is not the time to get comfortable.  Top of mind awareness (TOMA) can be easily changed.  There are other salespeople vying for your newly acquired customer.  Staying in contact with him or her is essential.  Again, this is where you must have a “keeping process.”

Increasing customer retention rates by 5% increases profits by 25-95%   (Source: Bain & Company)

Possibly years ago when the marketplace was less crowded, one sales call did it all.  Today, not so much. Top sales performers realize they must understand, build and maintain relationships with their customers.

 

Share on Facebook

Time to Connect Employee Engagement to Your Sales Culture

Employee engagement continues to trend upward as a search term and a demonstrated need by SMB owners and executives. What would happen in these professionals would connect the productivity (engagement) of their employees to sales culture instead of just a workplace culture?

employee-engagementA sales culture is where every employee from the bottom up understands the goal is to keep loyal customers and find new ones. Also this change of mindset would mean that customers are both external (paying for the solutions offered by the SMB) and internal (other employees).

Today, SMBs cannot afford the costs of employee turnover.  Good people are hard to find. Shortages of highly productive employees within various roles continue to increase.

With 97,.7% of all U.S. businesses under 20 employees, employees must be highly engaged with each other.  Having an attitude of “what can I do to help you” is essential with more work being distributed among fewer people.

Sales as I have written before is the transference of feelings. (Zig Ziglar). All employees are selling something such as ” I need for you to buy why I need this from you so I can get my job done.”

Suddenly employee engagement looks like “yes we can” from the frontline worker, the truck driver, the billing clerk to the CEO.  Everyone is 100% committed to increasing sales because they recognize their own actions impact business growth somewhere along the “supply chain.”

Additionally the cost of external customer turnover is equally prohibitive. From the research of Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%.  Replacing a loyal customer can cost a company 5 times more than keeping the lost one.

A highly engaged sales culture is truly one where employee engagement is unsurpassed. If you want to increase sales and profits, then maybe now is the time to shift your thinking regarding workplace culture.

* * * * *

Leanne Hoagland-Smith is Trusted Authority for Forward Thinking sales culture. She works to close the knowing doing gaps that restrict sustainable business growth. Call her at 219.508.2859 Chicago USA time.

Share on Facebook

Does Your Sales Script Include “I’m Sorry?”

The problem with sales scripts is they are taken to heart and deviation is forbidden.  Yesterday I experienced another failed sales script when I went into a national office supply store after my luncheon meeting.

sales-scriptsAs I entered this newly remodeled store, I glanced at the signage and started making my way toward where I believed the tabbed dividers would be located.  A young male associate asked if he could help and I told him of my request.  He quickly showed me to the aisle that I was already walking toward.

Then he asked me if I wanted a coupon because this store was now selling mobile phones?  I told him “No thank you” with a polite smile. This did not stop him from saying “It will just take a minute to see if you phone is ready for an upgrade.” I politely told him “No thank you” again and proceeded to search for the dividers.  Then he said “Are you sure?” 

By this time I was annoyed and told him rather sternly “I told you no thank you. I am not interested and you need to listen instead of continuing your sales pitch.”  Instead of realizing I was now an annoyed customer, his sharp retort was “I was only trying to save you money.”

Given I was in a hurry as I had other appointments and tasks to be completed, I refrained from any further verbalized comments, but that did not keep my brain from going a mile a minute.

  • Why should he get huffy as he was the one not listening?
  • Did he realize he was taking up my limited time and that was costing me money?
  • What did he think I had all day to spend at this store for something I did not want?
  • Where in the heck was the apology given he was the person interrupting my shopping experience?
  • What crazy sales training firm crafted this sales script without emphasizing about listen to the customer’s response before you continue your sales pitch?

Truthfully if I had not needed the dividers for a project to be completed later that same afternoon or if there had been another office supply store nearby, I would have left the store right then and there.

The last thing any sales associate should do is to show annoyance with the customer.  Yes sometimes customers can be wrong and annoying. However, this does not excuse unprofessional behavior on the past of the salesperson.

Now this salesperson’s behavior because of some stupid sales script has me not wanting to go into that store any more.  Yes it does only take one bad experience to turn a loyal customer onto the path of being disloyal.

My advice is to make sure your sales script includes the words “I’m sorry” when the customer or even prospect becomes upset.

Share on Facebook

The Sales Send Me the Brochure Kiss of Death

How many times are salespeople confronted with the “send me the brochure”  request also known as the “kiss of death?”  This happens even when considerable entry has been made into the mid size to small business via the CEO.

salesA colleague who was using a marketing strategy that I recommended recently shared with me his success and his failure.  He had sent a written note with an article pertinent to the qualified potential customer and received an email back from the CEO.  Great!

Then a telephone meeting was scheduled. Another success!

Next the CEO emailed him back and stated he may not make the telephone meeting, but he delegated his warehouse/shipping manager to be part of the call via an email. Not so great.

The warehouse manager emailed my colleague to send him some information.  Reluctantly he did as he did not want to violate the budding relationship with the CEO. Trouble!

A return email was received stating “we already have that service, but our contract expires next year.”  Once again, the kiss of death strikes in the form of “send me the brochure.” Failure, foiled again by a secondary decision maker.

My suggestion was to send the CEO an executive summary via the regular mail given the success of his initial contact.  This document would sum up the activity to date and would be another opportunity to schedule a call with the CEO. I also recommended putting in another article in the envelope.

What I do not understand is why marketing firms continue to push the glossy sales brochures that usually end up in the trash and are in most instances the kiss of death at this point in the sales process?   The only sales individuals who benefit from these ineffective marketing and selling tools are the marketing salespeople who sold the services and the printers who printed the 5,000 glossy  brochures.

Sometimes it is difficult to avoid this particular sales kiss of death. Yet, creative and innovative salespeople will work around this obstacle and with some perseverance continue to build the relationship and ultimately increase sales while gaining another loyal customer.

Leanne Hoagland-Smith is a heurist who disrupts the status quo by discovering new ways to guide and support rapidly growing mid to small businesses; those who wish to grow beyond their current employees and executives in career chaos.  She is recognized as one of the Top 25 Sales Influencers in 2013 by Open View Sales Labs and can be reached at 219.759.5601 CST.

Share on Facebook
RSS Subscribe!
Coaching Tip

People buy results or rather people buy the feelings the results deliver.

What’s Happening?

Internal Results interviews
Leanne Hoagland-Smith
. Some of her answers may surprise you.

Check out this podcast on value creation between David Brock and Leanne Hoagland-Smith

Listen to Leanne Hoagland-Smith at Sales Scenario podcasts

Another list of top sales bloggers

Pre-order this great book How to Get a Meeting with Anyone. You may recognize a familiar name.

Top 100 Most Innovative Sales Bloggers Honored this blog is included in this impressive list.

Best Sales Blogger Award for 2014 Third place awarded to Leanne Hoagland-Smith.

NWI SBDC awarded Small Business Journalist of 2014 to Leanne Hoagland-Smith. Awards.

Expand Your Business Horizons
Sign up to receive monthly newsletter devoted to small businesses and busy sales professionals Beyond the Black
Be the Red Jacket
Seeking an easy and practical book on marketing, selling and sales? Read the reviews at Amazon and then order your hard copy or eBook.
Sustainability Expert
The Institute for Sustainability
Ezine Expert
Blogroll – Leadership, OD
Contact Coach Lee

Leanne Hoagland-Smith
219.759.5601 Main Office CDT
219.508.2859 Mobile CDT

Office located near Chicago, IL

www.processspecialist.com Main Website

Sales Corner

Tracking by The Sales Corner
Blog Rankings
Business Blogs - Blog Rankings
Blog Top Sites
Plazoo
RSS Search
Blog Log