When a customer tells you that they’re giving their business to someone else, how do you respond?
This was the question staring me in the face this past week. For the customer in question, I should have seen it coming long before it happened. Now that the dust has settled, it’s time to dissect this common sales scenario step-by-step. This is the best way to call out patterns that occur all too frequently in business relationships, and they apply equally to eCommerce, retail, and B2B. This time, for me, it was too little too late. Let’s hope the following tips can help us all be more proactive as we evaluate our sales strategy in the future.
More Often Than Not, You Won’t Get A Warning
In my case, the customer told me after the fact. It almost felt like I was #10 on their checklist: Research new suppliers, evaluate new suppliers, negotiate pricing, negotiate terms… and only then inform your current supplier. As much as this stung, my case is the exception and not the norm. In the vast majority of cases, the customer won’t say anything. They’ll just… stop ordering. If the company doesn’t notice, we can arrive at two interrelated conclusions:
- Shame on them! Clearly they didn’t value that customer very highly.
- What the company doesn’t know won’t hurt them… much.
Note the tone of exaggerated irony. If you are not monitoring your customers’ purchasing and usage behavior, how much do you really value their business? If you earn your customers’ trust, if they believe that your solution delivers a unique value that no other company can match, and if they enjoy doing business with you… by most measures you’re doing pretty well. But if you’re not holding yourself accountable for your customers’ success, and if you’re not delivering your unique value proposition to every customer every time… then do you even have a business worth running?
Never before has it been easier for customers to take their business elsewhere if they believe they’re not receiving the service they deserve. Think of it this way: if you felt that a company didn’t care enough about your needs and goals, and if that company’s service or product was erratic and failed to inspire, wouldn’t you jump ship?
By the same token, never before has it been easier to track your customers’ behavior, especially as more and more businesses move online. There are a million and one resources that explain the ‘How’ and the ‘Why,’ but they all point to the same basic question: If there were a simple way for you to create and maintain a strong emotional connection between your customers and your brand, wouldn’t you do it?
The funny thing is, I thought that neither of the two conclusions above applied to me. I was in constant communication with members of their Finance Department and C-Suite, and one of their managers had even told me they appreciated that I made their lives easier. I valued them as a customer, and they knew it. So where did I drop the ball?
You Know What They Say About Assumptions…
Perhaps I didn’t value them highly enough. Here’s an abridged transcript of a conversation I had with my manager a few days before I received the disturbing news:
Andrew’s Manager: “Andrew, have you spoken with Customer X recently?”
Andrew: “You know it! We’re preparing their order to ship early next week.”
Andrew’s Manager: “Great Work!”
Andrew: <beams inwardly>
Yikes! I’m certainly not beaming now. There’s egg on my face and I’m playing catch-up with all my other customers.
Assumptions never bear fruit, just like hope will never be an effective business strategy. A conversation like this would have worked far better:
Two months prior to the anticipated order predicted above…
Andrew: “We’re so glad we can help you achieve your goals for Customer X, Manager X!”
Manager X: “Thank you, Andrew! We really appreciate all your help and we’re glad to work with you.”
Andrew: “We appreciate you. And while I know we’ve scheduled your next few orders for Ingredient X, I’d like to ask you a simple question: What if you received an offer from Competitor X at a lower price?”
Manager X: “That’s a good question. We enjoy working with you and in the interest of transparency we would share Competitor X’s offer to see how you would counter.”
Andrew: “Thank you, I appreciate that. And if you compared us to Competitor X and some members of your team wanted to begin ordering Ingredient X from them instead, what would I need to do to strengthen our partnership?”
And so on. Questions like this are not designed to make anyone comfortable. We can’t make effective business decisions based upon assumptions and expectations. We must uncover the truth. Conducting a dialogue like this with your customers can be extremely powerful,
even especially when it seems like everything is going just fine.
As leaders we must do all we can to learn more about our customers’ goals, do more to help them achieve those goals, and provide them with the resources they need to aim even higher.
In my case, I didn’t even get as far as considering whether or not these questions would reveal the unspoken goals of Customer X. Shame on me, indeed!
But there’s even more to the story than tracking your customers’ behavior and asking tough questions. You need to have a strategy in place before your customer even knows you exist.
Land And Expand
If I had backed up two months and shared an intimate dialogue with Manager X, then I would have been more prepared when they had told me they were switching suppliers for Ingredient X.
But here’s what would have worked even better (key points in bold):
Nine and a half months prior to the anticipated order predicted above…
Andrew: “Andrew’s Manager, I just found out about Soon-To-Be-Customer X. They’ve got a killer brand and I think we could do a lot of business with them.”
Andrew’s Manager: “Interesting! Tell me more.”
Andrew: “Well, I know they use Ingredient X, but that’s probably dwarfed by their needs for Ingredient Y.”
Andrew’s Manager: “Really? And what makes you say that?”
Andrew: “Because they’re in Industry X. I see Ingredient Y featured in many competing products, but none of those products also uses Ingredient X.”
Andrew’s Manager: “This is good intel. We have several strong sources for Ingredient X but we’re just getting started with Ingredient Y.”
Andrew: “I’m confident they can be our customer for Ingredient X, but we also need to plan to make them an offer on Ingredient Y towards the end of the year. Doesn’t the annual harvest for Ingredient Y come in August?”
Andrew’s Manager: “That’s right. It looks like this is really good timing. Do all you can to win their business for Ingredient X as quickly as possible. That way we’ll have more time to demonstrate our value as we investigate their needs for Ingredient Y.”
Andrew: “Awesome. I’m on it!”
Sigh… I see it so clearly now. Since I never took the time to investigate Customer X’s needs for Ingredient Y until a month ago, I had no leverage when they decided to give their Ingredient X business to someone else. Worse, I knew from the start that they must use at least 10 times as much Ingredient Y as Ingredient X. So even if I made a bunch of concessions on Ingredient X to keep their business, any savings to them would have been trivial compared to what they could save by negotiating on the value of Ingredient Y.
If you have a solution that can deliver Ingredient X on time and under budget… and your solution can also – with a few minor tweaks – deliver Ingredient Y, then Ingredient Y must be part of your strategy for winning and retaining Customer X.
And by the way… If you ever find yourself making concessions it’s already way too late. You may want to revisit that part about unique value above.
The only way to lose a customer without losing your cool is to extract as much information as you can from every interaction, every would-be interaction, and every missed opportunity. Increasing your intelligence and awareness now can only pave the way for much greater opportunities in the future.
Finally, if you found yourself grimacing and shaking your head as I recounted my experience, then I achieved my goal of shocking you into reflection and appropriate action. On the other hand, my trials pale in comparison to what American Express is facing right now. But to claim that either of us was down for the count would be a grave underestimation.
When I first began this blog I included a recipe at the conclusion of every post. I tried to pick something appropriate which would hearken back to the business principles I explored in the body. I dropped the recipes after I realized that I enjoyed writing about business much more.
But when life hands you not just lemons but a refreshing glass of lemonade, drink it with gratitude and shout your praise to the heavens. That’s how I felt when I was planning this post and I came across the article on American Express I linked above. When I read the section where American Express was compared to ketchup, I almost fell off my chair laughing.
“This,” I thought, “is perfect.”
May you always go in with a plan, may you always ask the tough questions, and may you never, EVER, have to play catch-up.
Inspired by Nourished Kitchen.
- 2 cups tomato paste
- 1/4 cup raw honey
- 1/4 cup plus 2 tbsp fresh whey*
- 2 tbsp raw apple cider vinegar
- 1 tsp unrefined sea salt
- 1 tsp allspice
- 1/2 tsp ground cloves
- 1 tsp thyme, ground
- 2 tsp rosemary, ground
- 2 TBSP oregano, ground
- pinch cayenne
- Spoon tomato paste into a large mixing bowl and fold in raw honey
- Whisk in one-quarter cup fresh whey into the sweetened tomato paste along with apple cider vinegar, sea salt, and spices. Continue whisking these ingredients together until the paste is smooth and uniform.
- Spoon the homemade ketchup into a mason jar, top with remaining two tablespoons fresh whey, cover tightly with a lid, and allow the ketchup to sit at room temperature, undisturbed, for three to five days.
- After three to five days, uncover the homemade ketchup and give it a thorough stir before transferring to the refrigerator. Naturally fermented homemade ketchup will keep for several months in the refrigerator.
*Making whey is easier than you think. All it takes is a little motivation… now you can make two delicious condiments!
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