Introducing the 'C' in CRM
Who is your customer, meaning, the "C" in customer relationship management? If you're a B2C business, it's "Average Joe." Think about a simple purchase like buying a can of soda. The soda brand doesn't treat its customers like individuals because each consumer probably spends about $100 a year. What the soda brand does is segment its markets and design for the average. What the "Average Joe" thinks is the key to success for B2C.
For B2B businesses with complex decision-making and high-value buyers, it is the opposite: The customer is the head soft drink buyer at a major retail chain, and her opinion is worth a fortune. Success in B2B depends on one-to-one relationships, not averages. Clients and prospects are more than names in a database. They are individuals, with a hierarchy of needs like the ones coined by famous psychologists in the past. There is no "Average Joe"—it is "Joe" who matters.
With this in mind, suppose your CRM shows that 80 percent of your company's clients are perfectly satisfied. That may seem great, but there are two dangers in this scenario that companies often overlook. The first is the word "satisfied." According to Harvard Business Review, 20 percent of "satisfied" clients reported having the intent to leave an organization. Prior to working with us, one of our B2B insurance partners found that 73 percent of their lost clients were "satisfied" or "very satisfied." Simply stated, it's not enough to satisfy Joe with a great service or product—you must make him loyal.
The second danger is assuming that if 80 percent of your company's clients are perfectly satisfied, then the rest must be too. Remember, you have no average clients. Imagine what would happen if that 20 percent of unhappy clients accounted for the bulk of your revenue. Be alert, pay attention to Joe's unique needs, and treat him like he is your only client. It may require more effort up front, but it will pay off in the long run.
Having researched client retention for more than a decade, I've heard my share of success stories. There's one that sticks with me, and oddly enough, it's about a sales account manager named Joe. I received an email from one of my clients, the regional manager for a Fortune 500 commercial insurance company, sharing a letter from the CFO of one of his largest customers. The letter read in part:
We just heard this afternoon that Joe is being taken off our account as account manager. Our preference is that Joe continues as our account manager because we think relationships matter. Joe has invaluable institutional knowledge about our properties and our operations and frankly, it’s the most important reason why we pay your company higher insurance premiums than your competitors to cover our properties.
We have a great working relationship with Joe based on trust, confidence, good communication, and common goals. It’s been a mutually beneficial partnership. These relationships do matter. We think you might want to reevaluate the importance of his role as our account manager…
The CFO knew exactly how much he was paying in annual insurance premiums; he knew how much coverage he was getting in return; and he knew he was dealing with one of many well-regarded insurance companies. He also knew he could lower his insurance premium if he put his program out to bid; but he didn’t. He stayed (and remains a client to date). Moreover, he was so invested in his current relationship that he took time to write a letter—all because of Joe. This CFO was not buying an insurance policy. He was buying a relationship. Joe was his trusted risk adviser—and he was willing to pay more for that.
B2B clients aren't homogeneous. Every account has its own unique needs and preferences, and every Joe matters. So take a look at your CRM, find Joe, and build a strong relationship with him. Companies don't do business, people do. And the ones that recognize the power of one-to-one relationships will the lead the pack while others disappear.
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.