The Value of a Happy Customer

There is tremendous value in having happy customers. It's easy to justify spending time with a customer, especially when we continue hearing how happy they are with our product and service. There is also merit in your sales rep. maintaining a high energy level. And nothing keeps them pumped up like the feedback and company of a satisfied customer.

But what happens when you discover that your field guys are spending all their time with the wrong customers? How can any of your customers be the wrong ones? This is the topic of today's post at FC Expert blogs. And what can you do once you discover that?

Comments

[Greg Krauska]

Valeria,
Making customers happy is a great idea if the customers are attractive in the first place. So the first step in dealing with the wrong customers is prevention: define good business. Clarify what an attractive customer looks like. When Sales knows what good business looks like, it tends to find it. So attributes like profit margin, revenue growth, product fit, implementation risk, for example, help companies weed out customers that might become boat anchors for their sales and service teams later.

For established customer relationships, Sales should periodically make an objective review the financial and working relationship to gauge whether they are over-serving the customer and meeting mutual objectives.

There are times when the value exchanged in a relationship gets out of balance. At that point, customer and supplier should come together to discuss what's happening. A simple SWOT process will reveal how the supplier can bring the value exchange into balance. I think most customers respect this kind of frank conversation - especially if it is a 2-way exchange.

Finally, leadership has a role in guiding this process. While building great relationships is what one of Sales' key roles, there are times when leaders need to step in and ask Sales to temporarily shift their approach to reshape the relationship with the customer.

[Valeria Maltoni]

Greg:

I'm with you 100%. However, there are certain relationship-based industries where some long time customers are also influentials in the circles where everyone is doing business -- and they may do considerable damage if things changed too much. It's almost like a mature fraternity or "club" thing.

Although unable to cite specifics, I have known of cases myself. That's why my point in the FC post was so different... and compelling.

Also, in traditional industries, even in agriculture, people get pretty set in the way things are (read have been). Sometimes you are able to have candid conversations at home office level, but then they do not trickle down to the regional offices as well as they could.

I hope others stop in if only to read your great analysis.

[Greg Krauska]

Thanks, Valeria and right on with your follow up comment. Smart players don't decide to make big changes in a relationship without at least a conversation, if not several. Negotiation, compromise and some gaming often follow. Doug Zogby (http://wiseguywisdom.blogspot.com/) talks about many examples of how people get blindsided by taking a narrow view of what's at stake and who really matters.

The organizations that think broadly about who is part of the conversation, are clear about their principles from the start - and then exhibit fair play as they adjust - are most likely to thrive.

[Mark Howell]

Valeria, I get what you're saying. Makes perfect sense. And yet...I wonder if there are other organizations like the ones I work with that understand the need, from a mission standpoint, to go after the remaining 80% and try to pull them in further? Sort've convert them to a 20%er? Maybe it is related to somehow engaging the 20% to become evangelists for the 80%.

Very thought provoking. Thanks!

[Doug Zogby]

My thanks to Greg Krauska for a plug on this blog. Valeria, both you and Greg are right on. I will try to bring what I hope is considered a different perspective to this conversation. In the vendor customer relationship it is important to recognize symmetries. Customers and suppliers are equal partners in creating value. The concept of listening to customers, (and “the customer is always right!) is the popular and accepted customer relationship position to take. Yet, when it comes to the supplier/vendor, the same is not true. Well why shouldn’t it be? The burden on the supplier is to get the product to where it needs to be on time, and for the right price. Now imagine if we talked to our customers that way!

I use Game Theory in my consulting practice, and one of the strategies emphasized is for players to recognize that working with suppliers is just as valuable as listening to the customer. Before I go any further, this is not my concept. It was brought to the fold in a book entitled Co-Opetition, by Adam M. Brandenbuger and Barry J. Nalebuff. So I need to give then their due credit. They have written a fascinating book.

It is beneficial to everyone involved, customer, vendor, competitor, etc to create the biggest pie possible. When making decisions in this context you need to examine value. If a customer wants something in a rush, but is not willing to compensate you for the extra cost involved, does filling the order under their conditions create added value in the relationship, or detract from it?

[Valeria Maltoni]

Greg -- yes, I like the idea of thinking about everyone involved, what's at stake and the long term consequences of decisions.

Mark -- I do wonder about that too. Yet, I've seen it consistently in several industries and sales cycles, there will always be customers who give you the bulk of your revenue and then the rest. The good news for smaller companies and consultants is the stability that having many different customers brings from a revenue stream standpoint vs. relying only on the one or two big ones.

Doug -- thank you for joining the conversation. I work with outside suppliers as augmentation of my staff -- very much in a peer model. What we do is look at the whole picture of what we need to accomplish and agree not only on what we're trading for what, but how we're going to do it together. So although I am their customer, our relationship is very much as team.

More on this in a post soon. You have all given great ideas and we should expand this conversation to this blog's readership again.