In last week’s blog I suggested that successful sales people for the future will not be pushers of products and services, they will not drone on about features and benefits nor will they be able to effectively create long term relationships without being customer advocates – pre, during and beyond the sale.
To begin the change, which surprisingly few salespeople have yet made, you could use the CSAVER® model as a guide.
C – customer, S – segmentation, A – assessment, V – value creation, E – execution, R – retention
“Customer focused”, “customers at the heart of our business” and other such phrases are prevalent in many mission statements, strap lines and goals of companies today. How many of those companies actually deliver for the customer in a way, which their customers see as valuable? Putting the customer first means just that – defining, developing and delivering for your customer in a way that helps them with their business now and in the future. So choosing how you go about your business should be defined by how your customers want to buy from you and not from how you want to sell to them; it should be based on what they perceive as having value not what you perceive is of value to them.
If customer value is of such importance then segmentation should be designed by how customers perceive value and the sales process designed to deliver to each segment accordingly, which may mean differently. Transactional, consultative and enterprise selling are 3 ways of segmenting customers based on how they perceive value – for more see the work my Neil Rackham.
Customer values – price and ease of purchase and value is intrinsic solely to the product
Customers view of sales force – adds no value
Customer values – Knowledge and value is extrinsic to the product.
Customer view of sales force – to grow their understanding of product and service to address their needs and provide additional, unthought of options
Customer values – excellent levels of value built on relationships and partnerships, which appear seamless
Customer view of the sales force – leverage mutual, strategic capabilities that transcend basic products and services
“Any sales force that wants to survive has no alternative, for unless its approach to creating value closely reflects its customers needs and value perceptions its efforts are bound to fail” 1
Taking decisions about how your company will segment its customers will inform your strategy, structure, processes, systems and resources. It will also help you decide which customers you want to do business with. Revenue today should not be the only reason. A high revenue customer may mean a high cost of sale and high “hassle factor” to maintain.
Whatever way companies choose to segment their customers, assessing the needs of those customers remains paramount.
Customers want problems solved and to understand what those problems are and create the solution to fit the way their customers do business will be a key differentiator.
Where a sales force exists, they will need to understand their customers’ problems now and foresee their problems in the future by becoming more knowledgeable about what business their customers are in and how their customers do business.
For sales people to be true customer advocates, they will need to translate customer problems into real solutions and then ensure that they and the rest of their own organisation delivers for the customer.
Value = benefits – cost – if this is the case, a salesperson that simply tells their customers what a great product and service they have will no longer be relevant. The differentiator for successful companies in the future will be in the provision of additional benefits and/or support to reduce costs.
“In the past, selling offered high rewards to those with the energy to sell hard and the tactics to close deals. In the new era, it will offer even greater bounty to those that can sell smart and understand and implement strategies for creating customer value.” 2
Do what you say you will in a way that is beneficial to the customer – not rocket science, yet how often does a promise of delivery not meet the reality. Intent is not enough. Customer advocates will take whatever steps are necessary to make the delivery as important as the sale. A company’s whole sales process needs to align to deliver for their customers. So organisationally this may mean less silos and more cross-functional teams, less job descriptions and more individual accountability. Every person in every department needs to ask, how can I contribute to successfully deliver for our customers?
“When companies fail to deliver on their promise, the most frequent explanation is that the CEO’s strategy was wrong. But the strategy itself is not often the cause. Strategies most often fail because they aren’t executed well” 3
“Loyal customers create more revenue more efficiently for the manufacturer, as costs to retain these buyers are typically much lower than the cost of acquiring new customers” 4
Satisfied or delighted, OK or excellent which words do want your customers to use when speaking to and about you. There are 3 measures that will help you in understanding whether you are meeting your customers’ needs
- Level of Satisfaction
- Likelihood of Return
- Propensity to Recommend
Achieving a high score in each of these measures will mean customers are more likely to stay with you. Whether you want them to stay is another matter but, you need to know how you are doing and in relation to your competitors in the first instance so you make informed decisions about future marketing and selling efforts.
Having satisfied customers is not enough to ensure retention. Successful companies will need to continually satisfy or exceed their customers’ expectations in ways that add value and are differentiated from their competitors. As an example, Ritz Carlton Hotels have as part of their credo
“The Ritz-Carlton experience enlivens the senses, instils well-being, and fulfils even the unexpressed wishes and needs of our guests”
As a result of this passion for “legendary customer service” they’ve won numerous awards for service.
Likelihood of Return
Measuring the % return rate of your customers will give you a base line for building on i.e. they liked what they received first time round and have said we want more. This gives you a second or third chance to give them the same and more to find out what else would increase there likelihood of returning again and help transform them into loyal rather than occasional customers.
“Service, or the lack thereof, is what causes customers to come back again or prompts them to try to find someone who does pretty much what you do, but just a little better, cheaper, faster or more interestingly” 5
Propensity to Recommend
Business by referral is one of the most cost effective ways of acquiring new business. Customers who have a good experience with your company can demonstrate their level of satisfaction by telling other people of their experiences. This can also create more opportunity for you. This cycle can be repeated through actually including customer retention in your business strategy. Hoping it will happen won’t make it happen.
Acting as customer advocates should be the role of every person in a company, not just salespeople, to contribute to enhancing customer retention.
Customers have a choice about how, when and where they do business. If companies are to gain and maintain the customers they want, they need to adopt a strategy that enables the whole company and in particular their sales force to become true customer advocates. Considering the CSAVERR model will enable customer advocacy and increase the likelihood of today’s success being maintained in the future.
1 & 2 Neil Rackham & John DeVincentis – Creating Real Value for Customers
3. Larry Bossidy & Ram Charan – Execution: The Discipline of Getting Things Done
4. Brand Solutions Inc. 2003
5. Ron Zemke – American City Business Journals Inc 2002