Building Customer Relationships

 
As I’ve mentioned before, I subscribe to several marketing and sales-oriented newsletters. Some are better than others – like MarketingSherpa – but all have some useful information.

A new one to add to your list is RainToday.

A recent article by Andrew Sobel (www.andrewsobel.com) defines six levels of customer relationships and five strategies to progress to the highest level.

Much of marketing seems to be about finding and getting customers and we seem to forget that keeping is at least as important. An estimate that’s been thrown around for years is that it costs approximately eight times as much to get a new customer as it does to retain an existing one. So if you have limited marketing funds, you’d probably do well to spend a good part of it on keeping your customers.

Here’s a short outline of Mr. Sobel’s Relationshp Levels:

Pre-client:

Level 1 – Contact: You know people you’ve met once or twice over the years, but with whom you have no particular relationship.

Level 2 – Acquaintance: You’ve developed a relationship with people who’ve become more than contacts.

Client:

Level 3 – Expert for Hire: You’ve been hired for a specific job and these people have a positive opinion of you and the work you did.

Level 4 – Steady Supplier: You have an ongoing relationship with someone who gives you regular repeat business.

Level 5 – Trusted Advisor: You’ve developed a long-term relationship with someone who trusts you and your judgment.

Level 6 – Trusted Partner: You’re viewed as someone who is a long-term partner in the business, not just a vendor.

To reach the highest level, there are five growth strategies:

Relationship Expansion – building many relationships within the client’s organization.

Capabilities Expansion – showing your breadth by linking to your client’s agenda and working with them on broad business issues.

Relationship Management Intensity – becoming “focused and systematic about a broad set of relationship management activities.”

Team Leadership – creating a client relationship where the best professionals in your company aspire to work with those clients.

Client Account Planning – developing a dynamic process that evolves to meet the client’s needs.

Not all client relationships are going to reach Level Six. In fact, those relationships are like your best friends; you’re lucky if you have a few that stand the test of time. And, depending on your business type, you may not get past Level Three or Four.

The important thing to remember is that success in business is based on relationships. The better your client relationships, the more value you add and the more success you help them achieve, the more likely they are to stick with you, helping you to be successful as you help them.

Developing Promotions that Increase Your Bottom Line

 
First, I can’t say enough good things about Marketing Sherpa – www.marketingsherpa.com. I can’t afford to purchase any of their reports and research at this point, but even their free information – I subscribe to their newsletters – is exceptional. Applying just the free tips and ideas will put the average marketer far ahead of the pack.

Today’s newsletter featured  the Chart of the Week: Ecommerce – Its’ Not All About Price, which shows a breakdown of how Consumer Products Marketers Rate Engagement and Sales Tactics.

While the focus is on ecommerce, the good news for those of us with just a toe in the water is this: the top performer is the good old fashioned Limited Time/Limited Inventory Promotion, which doesn’t require complex ecommerce software to implement. In fact, it doesn’t require an online presence at all! Marketers have been using this technique for – well, for as long as there have been markets.

Of the marketers surveyed, 49% rate it as Somewhat Effective and 43% rate it as very effective.

Second was Loyalty Programs, with 41% rating them as Somewhat Effective and 31% as very effective. This was followed by: Adding Customer Reviews and Ratings (to your website), Product Videos on the Site, and Special Offers such as gift wrapping, etc. I wonder where free shipping falls in the rankings…

The LTO (Limited Time Offer) is easy to use, even with a static website.

For example, with my online gallery – which is now up and running at www.thebacongallery.com - I plan to use PayPal to handle my online sales.

I haven’t set it up yet and don’t know what promotional options will be available to me with their services. However, I know I can announce an LTO in my website News section, post it on my social networking sites, send out an email blast to my customer database, and even Twitter it – when I have all that stuff set up.

When developing any promotion, it’s important to remember that all the old marketing rules apply; all that’s changed is the media we use to communicate them. And, thank goodness, most of the Internet options are still free!

What Good is Twitter, Anyway?

 
I admit it. Of all the social networking endeavors, Twitter is the most difficult for me to understand. I mean, what can you say with 140 characters?

But a recent article in the New York Times has given me some additional insight; there actually may be more to Twitter than the absurd stream of consciousness I’ve seen so far.

According to the article, “By tapping into the world’s collective brain, researchers of all kinds have found that if they make the effort to dig through the mundane comments, the live conversations offer an early glimpse into public sentiment – and even help them shape it.”

And combined, the “tweets” – I still want to call them twits – appear to carry a lot of weight.

“…over the weekend, Amazon.com learned how important it was to respond to the Twitter audience. After one author noticed that Amazon had reclassified books with gay and lesbian themes as “adult” and removed them from the main search and sales rankings, a protest broke out on blogs and Twitter.”

For any business, the potential for both positive and negative coverage is now at someone’s fingertips on a massive scale, even compared to the more mundane – and mainstream – blogs.

I wrote in an earlier post that e-newsletters are probably losing ground to blogs and other social media. Well, it appears that some of these old “new media” may already be losing ground to Twitter as well. It has an immediacy and speed that are astounding.

“…Twitter was most evident during the terrorist attacks in Mumbai last November and when a jetliner landed in the Hudson River in January. People were twittering from the scenes before reporters arrived.” (Italics mine.)

One last spin on Twitter that made me sit up and take notice comes from Paul Saffo, the Silicon Valley futurist, quoted in the Times article, “Twitter reverses the notion of the group. Instead of creating the group you want, you send it and the group self-assembles.”

What texting was, just recently, to groups of friends; Twitter now is to the entire Internet world.

Of course, from a practical standpoint, there are a lot of other things you can do to promote your business; Twitter still seems to be on the “bleeding edge.” But, I’m pretty confident that its move into the mainstream is inevitable. All we need now is some nice, simple, cheap software to allow us to monitor and assess every “tweet” and project how it might affect our businesses…

A Marketing Research Caveat

 
As a friend of mine likes to say, “Research proves that research works.”

It sounds a little cynical, I know, but it’s a valid warning for all who undertake a research project. No matter how careful and objective the researchers try to be, it’s possible that their ideas and preferences will affect the results of the research to some degree.

It’s also possible for a researcher to consciously create a survey or gather data that support a specific conclusion.

When using any type of research, it’s essential to try and discover the “truth” to the degree that’s possible, by letting the researchers do their jobs. Tell them what you want to know and work with them to clarify your objectives and the parameters of the project, but let them handle the details. It’s more important for the results to be accurate than that they support predetermined conclusions.

There are also plenty of examples of research that’s been astonishingly wrong. Remember New Coke? All the research indicated the product would be a huge success. Oops…

One way results can become skewed is how the questions are written. You’ve probably taken a survey where the questions limit you to certain options, even though the answer you’d like to give may not be any of them. Here’s a simple example:

“On a scale of one to ten, how would you rate the following automobile manufacturers?”

On the surface, it seems pretty straightforward, but there are some subtle problems with it:

1. Is this an overall rating or does it relate to a specific area?
2. Is the question about rating the automobiles themselves or the companies that make them?
3. Should you answer based on current or past experiences with the manufacturer?
4. What if you’ve never had any personal experience with the manufacturer, what should be the basis of your answer?

These “loaded” questions are what good researchers try to avoid, but they can still creep in for many reasons.

There’s nothing wrong with research, in fact, we do it formally and informally every day. Which can of beans costs less per ounce? Do you like the cheaper brand? Are you willing to sacrifice taste to save money?

Research can be a very valuable tool, so go ahead and use it, just don’t trust it too much…

Communicating and managing expectations

 
In the most recent issue (9/08) of Strategies – The Journal of Legal Marketing, Amy I. Stickel writes in her article “What GCs Really Want” that “the answer seems to be: a little more understanding and a lower bill.”

The article is based on InsideCounsel magazine’s 19th Annual Survey of General Counsel and points to (at least) two areas where outside attorneys can improve their client relationships.

First, law firms believe they’re doing a better job than their clients think they are. While 43% of firms gave their performance an “A” grade, in-house counsel rated only 16.8% as an “A”. If your firm is doing a great job, communicate it in ways that address your clients’ problems, fears and needs so they recognize how much you help them.

Of course, if you have an unrealistically high opinion of your work, it would be wise to bring your assessment into line with your clients. Ms. Stickel writes, “nearly 42 percent of in-house counsel reported that they have fired or plan to fire a law firm in 2008, an 8.5 percent increase from 2007’s survey.” Sobering information in these challenging economic times.

Second, “in-house lawyers are not convinced their outside attorneys understand either their financial pressures or their business needs.” If your firm doesn’t understand your clients’ business and isn’t meeting their expectations, you need to change the situation – immediately -  or you may find yourself looking for new clients. And, do you really want to spend a lot of time and money on marketing?

It’s essential to understand that in order to have a successful practice over the long haul, you must consider your clients as partners. Their interests and problems have to be your interests and problems. Your job is to make their lives easier. Period.

So, to help get things off to a good start, here’s what in-house survey respondents said was most important to them:

1. Responsiveness
2. Industry experience
3. Creative solutions
4. Billing rates
5. Reputation

Good GCs are always asking, “What have you done for me lately?” You need to be ready with answers that will delight them.