leadership
Creating Customers for Life (4 minute read)
The goal for any business, regardless of the products you sell or the services you provide, should be maintaining a satisfied customer base that is loyal to your business. The idea is to create a mutually beneficial relationship that motivates people to want to continue working with you despite the availability of competitive products or motivations (e.g., those pushing for a “Corporate Standard” involving another product.)
The best part is that this concept applies to all companies and all Product Life Cycle stages. Whether your company is on a rapid growth trajectory towards ‘Unicorn status,’ your offerings are mature and viewed as ‘less exciting.’ The approach will also help if your products decline and you seek the ‘longest tail’ possible. At each phase, there are credible threats from competitors that seek to grow through the erosion of your business.
Several years ago, I was responsible for two product lines in two major geographic regions (Americas and APAC/Japan). Our attrition rate (“churn”) was traditionally slightly below the industry average. We began seeing an increase in churn and a corresponding decrease in organic growth. Both were indicators that something needed to change.
After discussing tactical approaches to address this, our small leadership team agreed that this was a strategic issue we needed to address. The result was an understanding that we needed to create ‘Customers for Life.’ Everyone agreed with the concept, but due to various differences (culture, who our customer was – end customer vs. channel partner, buying patterns, etc.), we agreed to try what was best for each of our regional businesses and share the results and lessons learned.
My approach focused on developing strong relationships that fostered collaboration and ultimately led to growth and success for both parties. The basic premise was simple:
- People tend to buy from people they like, respect, and trust. Become one of those people for your customers.
- Helping companies achieve better business outcomes leads to greater success for our customers and us.
How did we do it? It was a systematic process that my team used that included the following:
- Develop simple profiles for each customer (e.g., products used, date of first purchase, size of footprint, usage and payment trends, industry).
- An optimal size – based on the size of the product footprint, annual amount spent with us, or size of the company- was used to prioritize companies and organizations with the most significant potential impact.
- Make contact multiple times yearly, not just when you want money.
- These “out of cycle” contacts became very important.
- Ask questions about key initiatives, milestones, and concerns.
- We documented the responses, which helped seed following conversations and demonstrate a genuine interest in what they were doing.
- Follow-up!
- Request meetings to understand how they use our products and get a brief update on what our company has been doing.
- Meeting people face-to-face is always good.
- Learning more about their business, systems, goals, and challenges created opportunities to add value and become more of a partner in success with that customer.
- Look at what they were doing with our products and offer suggestions to do more, do something better or more efficiently, call out potential problems and offer suggestions, and discuss best practices. Often, we would have a technical expert follow up and provide an hour or two of free assistance relating to those findings.
- Look for opportunities to congratulate them.
- It demonstrates that they are important enough that you are paying attention. Google Alerts made this easy.
- Regularly ask our customers if there is anything that we could do to help them.
- They would often reciprocate, leading to increased references and referrals.
- Continuous Improvement – Analyze the results and refine the process as needed on an ongoing basis.
Before the meeting, we would spend an hour or two researching the company, its history, and significant events for it and within its industry, and identify its top 2-3 competitors. My consulting background came in handy as I “looked between the lines” to better understand the situation as we planned the meeting, focusing on what we wanted to walk away with and what we wanted the customer to walk away with from that meeting.
As we met with our Customers and Channel Partners, we would explain what ‘Customer for Life’ meant to us and the potential benefits to them. Before the meeting, we would check to see if we had (or they wanted) an NDA so they could speak freely and with confidence. Trust was important. The information disclosed would help us understand their situation, and we would map this against other customers in search of actionable trends. Showing interest and understanding created credibility. Asking relevant questions allowed conversations to progress to substantive issues in less time. From there, we focused on specific points that would positively impact that customer.
Over the course of two years, my team and I helped our customers innovate by providing different perspectives and ideas, modernizing (e.g., moving to spatial analytics to get a more granular understanding of their own business, cloud-enable their systems to increase responsiveness to their business and often control costs), improve their systems and grow their businesses, and more. We also received feedback that helped us improve our products and a variety of processes – something that benefitted all customers. Occasionally, we learned about problems they were having. We took ownership of the issue, brought in the right people, and helped the customer find a resolution. Collaboration and success created strong relationships with many customers – especially in the segment with the largest customers and companies.
From a business perspective, our customer churn decreased by 50% over the same period, and organic growth increased slightly more than 20%. We had achieved our objectives and improved our bottom line. The concepts behind Strategic Account Management, Voice of the Customer, Customer Experience, Customer Loyalty, and Customer Success had blended into a manageable practical approach and provided a great ROI.
One of my biggest lessons learned was that adopting this mindset and creating a repeatable process should be started sooner rather than later.
Every day you are not creating your own ‘Customers for Life,’ there is a good chance that your competition is. Don’t let that happen to your business.
Edit: Added category and tags
Are you Visionary or Insightful?
Having great ideas that are not understood or validated is pointless, just as being great at “filling in the gaps” to do amazing things does little if what you are building achieves little toward your needs and goals. This post is about Dreaming Big and turning those dreams into actionable plans.
Let me preface this post by stating that both are important and complementary roles. But if you don’t recognize the difference between the two, it becomes much more challenging to execute and realize value/gain a competitive advantage.
The Visionary has great ideas but doesn’t always create plans or follow through on developing the idea. There are many reasons why this happens (distractions, new interests, frustration, lack of time), so it is good to be aware of that, as this type of person can benefit by being paired with people willing and able to understand a new idea or approach, and then take the next steps to flesh out a high-level plan to present that idea and potential benefits to key stakeholders. People may view them as aloof or unfocused.
The Insightful sees the potential in an idea, helps others understand the benefits and gain their support, and often creates and executes a plan to prototype and validate the idea – killing it off early if the anticipated goals are unachievable. They document these experiences, learn from them, and become increasingly proficient at validating the idea or approach and quantifying the potential benefits. They are usually very pragmatic.
Neither of these types of people is affected by loss aversion bias.
I find it amazing how frequently you hear someone referred to as being Visionary, only to see that the person in question could eliminate some of the noise and “see further down the road” than most people. While this skill is valuable, it is more akin to analytics and science than art. Insight usually comes from focus, understanding, intelligence, and being open-minded. Those qualities matter in both business and personal settings.
On the other hand, someone truly visionary looks beyond what is already illuminated and can, therefore, be detected or analyzed. It’s like a game of chess, where the visionary person thinks six or seven moves ahead. They are connecting the dots on various future possibilities while their competitor is still thinking about its next move.
Interestingly, this can be a very frustrating situation for everyone.
- The Visionary with an excellent idea may become frustrated because they feel an unmet need for understanding.
- The people around that visionary person become frustrated, wondering why that person isn’t able to focus on what is important or why they fail to see/understand the big picture.
- Others view the visionary ideas and suggestions as tangential or irrelevant. It is only over time that the others understand what the visionary was trying to show them – often after a competitor has already begun implementing a similar idea.
- The Insightful, wanting to make a difference, can feel constrained in static environments, which offer little opportunity for change and improvement.
Both Insightful and Visionary people view themselves as strategic. Both believe they are doing the right thing. Both have similar goals. What’s truly ironic is that they may view each other as competitors rather than seeing the potential for collaboration.
A strong management team can positively impact creativity by fostering a culture of innovation and placing these people together to work towards a common goal. Providing little time and resources to explore an idea can lead to remarkable outcomes. When I had my consulting company, I sometimes joked, “What would Google do?” to describe how amazing things were possible and waiting to be done.
The insightful person may see a payoff from their ideas sooner than the visionary person, because they focus on what is already in front of them. It may be a year or more before what the visionary person has described shifts to the mainstream and into the realm of insight – hopefully before it reaches the realm of common sense (or worse yet, is entirely passed by).
I recommend that people create a system to gather ideas, along with a description of the purpose, goals, and advantages of those ideas. Foster creativity and innovation by rewarding people for participation, regardless of what becomes of the idea. Review those ideas regularly and document your commentary. You will find good ideas with luck – some insightful and possibly even visionary.
Look for commonalities and trends to identify the people who can cut through the noise or see beyond the periphery and the areas having the greatest innovation potential. This approach will help drive your business to the next level.
You never know where the next good idea will come from. Efforts like these provide growth opportunities for people, products, and profits.
Investing in Others – Becoming a Mentor
I have been very fortunate throughout my career. There have been incredible opportunities, risks with big rewards, and lessons learned from mistakes and failures (e.g., one of the biggest early lessons is that most mistakes will not kill you, so you can find a way to recover from them). In hindsight, the people who saw something in me and invested in my career – my mentors – have been most valuable in shaping my career.
None of these people had to help me. It’s possible that they did so for their own benefit (i.e., the better I do my job, the easier it is for them), but I believe they were passing along a valuable gift. I was lucky to have received these gifts early in my career, as they have been invaluable both personally and professionally.
As a mentee, you may not recognize either the value of what you are receiving or the effort that has gone into providing that gift to you. You fully appreciate what others have done for you only years later.
In my first programming job, my manager (Jim) assigned me to work with various key people and would follow up to ask what I had learned. One day, he gave me my first project – something that was far above what a new programmer was tasked with. I was excited but anxious because I did not want to let my mentor down.
I only had six months of experience, and this was a big project for an important automotive customer (Subaru), the first fully customized customer loyalty coupon system for a major auto manufacturer in the late 1980s. It was a stretch for me, and the system had to be production-ready in six months.
Jim let me build it, checked daily at first to see if I had questions, and provided feedback and direction if I asked. Aside from that, he pretty much left me alone. He seemed more confident in my ability to succeed than I was at the time.
After two months, I thought I was finished. We reviewed everything, and Jim constructively picked apart my system, pointing out various flaws and discussing the logic and reasoning behind my decisions. We spent half a day on this exercise, and only years later did I realize he was helping me learn more than just validating the system design.
After another two months, we reviewed this system’s second iteration. He told me that while this version would work and would be acceptable from anyone else, I still had time remaining, and he was confident that I could do even better next time. He provided a couple of tips about high-level areas he focused on while designing and developing systems and left it at that.
When I returned with the third iteration of the system, he reviewed it, smiled, and said he could not have done it better himself. At first, I was proud to have completed my first independent project, but later I realized how much I had learned over those six months. This experience provided me with a lifelong benefit and the motivation to help others in a similar manner. My mentor was (and still is) a great leader!
As a manager, he had so many reasons not to give me the project, to just tell me what to do, and to not let me redo it (twice). From a short-term management perspective, what he did was wasteful. But, from a big-picture perspective, he was doing things that helped me create more value for the company for the 3-4 years I continued working there. The benefits outweighed the cost; Jim was wise enough to see that.
Several years ago, a young woman in Australia contacted me via LinkedIn, asking for suggestions on improving her skills to advance her career. I gave her many assignments over the course of a year, and she did amazing work. She advanced in her company, later relocated to another country, and then switched industries. She currently holds a high-level position and has been very successful. It made me feel good knowing that my efforts played a small part in her advancement.
From my perspective, it all comes down to how you view people and relationships. Are they like commodities that are used and replaced as needed, or are they assets that can grow in value? I like to think that I have helped several people’s “career portfolios,” which helps ensure that business is not a zero-sum game. Hopefully, those people will do the same, increasing leverage on the investments that started with Jim.
So, what do you think?
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