Logo
BodyBGTop
Putting the 'R' in CRM
It's time to explore the human side of CRM in the B2B space. The second in a three-part series.
Posted Jul 8, 2016
Page 1

Last time, we introduced Joe, the “C” in customer relationship management. Hopefully, you’ve since found Joe in your system and committed to building a one-to-one relationship with him. Now the real question is, how?

Focus on Retention

Putting the “R” in CRM means protecting and developing the relationships you already have to achieve organic growth. Step one is to focus on retention, then cross-selling and only after that, acquisition. Acquisition-focused selling is great for companies in early growth mode; but for 99 percent of businesses, the period of rapid growth is over, and acquiring new clients means taking them from elsewhere. This is difficult, very expensive, and may pull attention away from existing client needs, causing some clients to leave. 

Fred Reichheld’s “The Loyalty Effect” clearly showed that retaining existing customers is hugely profitable. In fact, a study cited by Reichheld revealed that reducing defections by only 5 percent can boost profits anywhere from 25 to 80 percent. Our own research with a hospital client reached a similar conclusion: The value of each retained patient was $10,500, while the value of a lost patient was $14,200.

Classify Your Client Relationships

With a retention-first mind-set, step two is determining the state of your current relationships. At salesEQUITY, we’ve found all client relationships can be classified into one of four levels:

  • Trusted Adviser. “I love working with you.”
  • Predisposed. “I like you, but…”
  • Transactional. “You’re fine.”
  • Antagonistic. “You’ve let me down.”

Antagonistic clients have been disappointed and are actively seeking to replace their provider. A step above, clients in transactional relationships are “satisfied” with the perfectly average product or service, and view their provider as replaceable. Predisposed relationships are slightly above average, where clients stay because of convenience or a pattern of successful transactions. Trusted adviser relationships are well above average and provide the greatest benefit.  

Clients in trusted adviser relationships are referral customers who advocate for their salesperson and seek to buy more from them rather than replace them. According to our research with The Brookeside Group, these clients are nine times more likely to call their provider first when they have a problem. They spend double or triple the average share of wallet. They stay a client four times longer. Step three, then, is becoming a trusted adviser.


Become a Trusted Adviser

We’ve dedicated more than a decade of cross-industry research and collected 2 million data points to answer the question “What does a professional business relationship look like?” What we found are six dimensions for measuring “relationship climate”—the nature of a client relationship—and where an individual is on the path to becoming a trusted adviser.

The first two dimensions are “satisfiers,” which are considered the “ticket to the game.” Providers get no points for doing these well. The other four dimensions are “motivators,” which compel clients to increase engagement, expand the relationship, buy more, refer others, and protect the provider internally.

  1. Integrity. Do you do what you promise?
  2. Competency. Do you know your business?
  3. Recognition. Do you treat me like an individual, or like an average?
  4. Proactivity. Do you look out for me and protect me from surprises?
  5. Savvy. Do you understand my business?
  6. Chemistry. Do we click and work well together?

Of course, it’s hard to “do” integrity—that’s where individual behaviors come in. Many behaviors, like the act of writing things down, are shockingly simple, but have profound, positive effects on client engagement.

Helping justify and fully explain recommendations and expenditures to others is a great example. A savvy salesperson not only gets a client excited about an idea, but also arms them with facts, statistics, and sample wording to help them sell the idea internally, against organizational politics and other priorities. Becoming a trusted adviser is both about providing value and communicating it to the right people.

What if I told you I could find 33 percent more revenue in your current client base? Hopefully, you'll find this not so far-fetched having explored the steps above. Putting the “R” in CRM is essential for creating the trusted adviser relationships that fuel long-term, organic growth. In mature markets where selling is more like hand-to-hand combat, it’s relationships that give companies the advantage.


Tom Cates is founder, chief client officer, and chief storyteller of salesEQUITY, the only SaaS-based client engagement platform that uses a proven quantitative methodology to measure and assess and provide virtual coaching for B2B client relationships. Cates has over 15 years of experience leading consulting engagements focused on the client-facing elements of sales, marketing, and client service functions in a wide variety of industries. Follow him @salesEQUITY

Page 1
To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Search
Popular Articles
 

BodyBGRight
Home | Get CRM Magazine | CRM eWeekly | CRM Topic Centers | CRM Industry Solutions | CRM News | Viewpoints | Web Events | Events Calendar
DestinationCRM.com RSS Feeds RSS Feeds | About destinationCRM | Advertise | Getting Covered | Report Problems | Contact Us