salesEQUITY once saved a client from losing a $6 million customer relationship. How did we do this? By helping the account manager realize their relationship with this client was Transactional. A simple intervention saved the account manager's client from seeking out competitors.
So, what is a client relationship? And how do we define it? How to you build customer loyalty? Is it just a hollow agreement between two parties? Strong client relationships are not hollow. They are about an equal partnership that radiates trust and care. You don't earn your stripes by building short-term relationships. Relationships don't transition into long-term partnerships when clients tell you they’re "fine" and have nothing else to say. When you’ve earned a client's trust and loyalty they'll have plenty to say, and in order to do that, you must become a Trusted Advisor?
YOU WANT YOUR CLIENTS TO SEE YOU AS A TRUSTED ADVISOR
If you don't know by now, a Trusted Advisor is someone who puts their clients’ interests before their own. They build strong relationships with their clients through integrity and competency. They don't just sell. They build invaluable connections with their clients. Without the integrity and competency of this salesperson, and a combination of other dimensions the relationship wouldn't last the test of time. When clients stick around for the long run, it's because 3 client relationship goals are being met:
- EARNING (AND OFTEN INCREASING) THE SHARE OF WALLET - One of the greatest rewards you can earn in sales is by increasing your revenue growth through an existing client. By working hard to build and nurture client relationships the potential to earn 2.5 times more share of their wallet goes up once Trusted Advisor status is achieved. You'll earn more business if there's a strong relationship.
- MANAGING MARGINS - The stronger a relationship gets, then the higher your revenue margins will be. Managing relationships effectively pays off in the long run, because the opportunity to cross-sell clients increases. If the relationship isn't seen as one of a Trusted Advisor, then it won't experience the kind of revenue growth and commitment necessary to become a rewarding experience. Period.
- IMPROVING CUSTOMER RETENTION - Having an 85% retention rate sounds pretty good, right? It means that your clients stick around for an average of 7 years, but if you lose 15% of your clients every year without acquiring any, then you'll be out of business. And if you manage to survive somehow, you'll be fighting to barely break even, that's if acquisition costs don't bury you first.
WHY IT ALL MATERS
The truth is long-term customers are more profitable than newly acquired ones. Given your industry and situation, achieving long-term profitability happens more effectively through managing your client relationships with greater care.
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