Every company, whether it’s product or channel is physical or web based, can summarise it’s mission in three succinct phrases: build great products; “get, keep and grow” customers; make money directly or indirectly from these customers. Customer relationships are the strategies and tactics to get, keep and grow customers.
Getting customers – sometimes called demand creation, drives customers into your chosen sales channel.
Keeping customers – or retention, gives customers reasons to stick with the company and product.
Growing customers – involves selling them more of what they’ve brought as well as new and different products and encourages them to refer new customers.
By add the two diagrams below together you create the entire customer relationship life cycle. The “get, keep and grow” are among the most important factors for any start-up.
This part is the first section of the top diagram. The funnel section starting with awareness and ending with purchase.
As you move customers through the funnel, the number of potential customers declines as their interest grows, as they consider buying, and then as they make their actual purchase.
Getting customers, or demand creation, has four distinct stages in the physical channel: awareness, interest, consideration, and purchase.
Awareness – lets potential customers know about your product or service and gets them thinking about your product.
interest – means the message is no longer being ignored even if the prospect isn’t ready to act. One more push could move this prospect to the next step.
Consideration – if the message is powerful enough or contains a convincing offer that might lead to the thought, ” why don’t I” or ” what if I” consideration may take the form of a free trail where is offered.
Purchase – clearly the desired result of “get” activities.
While the description of customer relationship activates may seem simple at first, it’s actually the result of a complex interplay among customers, the sales channel, the value proposition and the budget for marketing activities. When you get it right, it all comes together in a repeatable, scaleable, profitable business model.
The first three stages in the physical channel are primarily driven by your communication through free and paid media.
Be sure to run tests for ALL methods used to gain customers in both your paid and free media. Always compare the price and time taken with number of prospects reached and/or number of sales. This will give you your return on investment ROI.
It’s important to to think now about how the company will keep, or retain, customers it’s worked hard to get. It’s always cheaper so is a very important part of this relationship cycle.
For this to work you must deliver on all your promises that got the customers to buy in the first place. Customers need to love the product and service, and every customer-facing aspect of the business model has to perform exceptionally, from customer service and support to complain-handling, delivery, billing, and more.
The company will need to make upgrades and changes to there product or service to always stay ahead of competition.
Loyalty programmes – how will you use these to retain customers… Points, rewards, discounts or multiple-year contracts.
Customer check-in-calls – plan to call every customer or 1:3/1:5, once a month or every quarter simply to thank them for their business and see how they are getting on. Probe for feedback on the product, features and functions. Email is a commonly used tool for this however nothing beats a voice or personally touch like a phone call. (adding a human side to any part of business give you more credibility)
Retention programs live or die by a close monitoring of customer behaviour to learn who’s staying, who’s leaving and why.
Most start-ups think only about the revenue they receive in their first sale to a customer, but smart companies think about the revenue they can get over the lifetime of the relationship they have with a customer. There is two parts to your grow stages (shown in the second diagram), getting customers to buy more and also refer you to others.
Cross sell – encourage buyers of a product to buy adjacent products.
Up-selling – promote the purchase of “more” of higher-end products.
Next sell – concentrate on the next order: can the company encourage a long-term contact, sell additional products and possibly become the customers primary seller. These basic customer growth strategies work in consumer goods as well as business-to-business.
Unbundling – grow revenue. If a product is complex or multi-featured, split it into several products, each sold separately. This works well in many tech, software, and industrial product areas.
Get these right and you will create an equally as important viral loop.