Businesses exist only for the purpose of making money. Whatever a business makes or type of service it provides, money is only produced when the goods or services are actually sold to a customer. It is only from the act of selling that income is derived for the business in question, thus the ability to “sell” is fundamental to the success of every business.
The principle aim of Marketing is to produce profitable income for the long term future of the business. Producing profitable income for the long term requires getting customers and retaining them. Gaining customers means identifying their potential needs and completing successful selling, requiring an understanding of potential customers’ problems and providing satisfactory solutions. Customers provide income on the completion of the sale of goods or services that satisfy their requirements.
While getting the sale is the ultimate act which provides the income, the sale itself is not synonymous with customer satisfaction. Customer satisfaction is the primary necessity as it encourages repeat sales, and customer retention. Retaining customers is important for every organisations supplying goods and services, but especially for those involved in business to business, supply chain, business and consumer services, consumer supplies, and hospitality.
Obtaining a new customer is always difficult, but in a competitive world, retaining a customer for further sales is essential to maintain the business. It is easy to lose customers and hard to replace them. Gaining customers and selling to them is expensive but necessary, not only to grow the business, but to maintain a customer base that will otherwise decline through natural wastage. Once gained, it is therefore obvious that it is economically more efficient to retain customers and gain repeat sales. Businesses should consider carefully how they treat their customers, and what it takes to retain or replace the business and income they provide. Retaining customers requires providing a service that customers can rely on.
Good communications with the customer is the basis of customer service, but it also involves everything else, including credit control, payment, account management, packaging, delivery, product returns, repairs, complaints and general customer assistance.
For the commercial manager responsible for increasing and maintaining profitable income, retaining customers and their business should be of prime importance. However judging by the performance of many large companies, customer service is in practice not a priority.
To identify the factors that influence and encourage customer loyalty to retain their business and repeat sales, commercial managers need to consider:
- Does the quality of the product or service consistently meet the standard set by the producer and the expectation of the consumer? –
How do you know? - Is the delivery of the product or service reliable? Does it meet the company promise and the customer expectation? How do you know?
- Is a return system easy for the customer to enact if required? How do you know?
- Is the billing and credit control system easy for customers to access and understand?
- Is a customer complaint system easy for the customer to access and to contact named individuals rather than an Artificial
intelligence system? - Is the web-site clear and easy to understand and intuitive for the customer rather than the web-site designer?
- Are all business contact methods, telephone, e-mail and postal, readily available to existing and potential customers?
- When customers or potential customers telephone the business, how welcoming and helpful is the response? How do you know?
- How long does it take to respond to e-mails, letters or telephone calls? Are all such contacts routinely answered, and if not, why?
Customer retention depends on the standard of the product or service and the support provided by the supplier. A high priced product expects a high level of service to support it.
What should the commercial manager do to improve and maintain customer retention?
Having identified those factors which influence the customers, the commercial manager needs to ensure that all personnel involved in assisting the customer in any way, understand the importance of the customer in providing the income on which they and the business depends, and how their actions influence the customer in providing repeat sales. Making the first sale brings in the customer and the initial income, but only good customer relations and service ensures the repeat sale and develops a revenue stream.
The commercial manager responsible for getting and maintaining profitable income, needs to ensure that the relationship between a supplier and its customers is the principle influencer of the customer’s satisfaction, loyalty and repeat business. While obtaining sales income is a prime objective of the sales team, customer satisfaction should be at the centre of all those other activities that support the customer, such as production, service support, distribution, payment and credit control. This requires the effective management of all those activities which directly and indirectly effect customer relations.
A sale is not synonymous with customer satisfaction. Concentration on achieving sales can bring short term benefits of income, but only concentration on customer service and satisfaction can bring long term benefits of customer retention and profitable income for the future,
© N.C.Watkis, Contract Marketing Service 01 Oct 24