In yesterday’s blog post the discussion centered around business leaders and sales managers over-emphasizing the importance of new customer relationships and the source for revenue growth. The premise of the post was that the behaviors being encouraged and rewarded are transactional and not relationship based. Hence, these managers pay little attention to the opportunities existing customer relationships offer in the form of increasing sales through the introduction of new, different, or additional products and services.
Dealing with these behaviors and this mindset requires several actions:
- Educate the sales team and the management team on the strategic opportunities associated with developing and leveraging existing relationships to grow their businesses.
- Provide incentives and programs that rewards the behaviors of increasing sales with existing customers. Note, it is less costly to increase sales with existing customers; therefore, there is an opportunity to provide additional incentives for increased sales with existing customers. Also, this incentive keeps your sales force more engaged with their customers if there is a growth and retention incentive attached to it. (Note that I do not necessarily approve of bribing people to do what it is right. This just makes good sense.)
- Develop programs and offerings that would be attractive to existing customers. And hold the sales team accountable for their activities relating to these offerings.
- Hold the sales team accountable for customer retention. This includes customer service. Whether you offer them an incentive for maintaining customer relationships or a penalty for client churn, there are opportunities to keep them focused on their existing relationships, as well.
Great sales behaviors are relationship based. In the sustainable revenue formula (SuRF) a key component of the revenue expansion is based on engaged customers. If your business is churning out customers as fast as your sales team is bringing them in, your business is not growing or sustainable. Your organization, which includes the sales force, needs to recognize the importance of customer retention and customer expansion as a component of the sustainability model. Nothing gets people more involved in these activities than effective education, motivation, and a few incentives to make it work.
