Seth Godin said in a recent blog : “here’s what most businesses do with their best customers: They take the money”, then went on to suggest that you think of the customers who bring you the most referrals as being your best customers, and then think about how that might change how you treat your customers.
Part of the answer is in “Client Base Management”, one of the areas that Business Coaches find they are in high demand for right now. When I talk about this, I refer to the “three R’s of your Customers” :
- Revenue
- Relationship
- Referrals
There are layers within each of these that are used in coaching clients to their own solutions, but I’d simply express it by saying that the value you place on your customers is a combination of :
a) the Revenue you earn from them,
b) the quality and nature of your ongoing Relationship with them,
c) and finally (and Seth is quite right to emphasize this) the referrals they bring you.
Businesses are chasing new top line revenue in this recession without enough focus on the profitability of their existing business or of the new clients they are looking to bring in. What is more, with cuts and savings that have had to be made in staff and resources, many are operating at or close to full capacity, so their team wonder how they can handle any new business that may be brought in with the resources they have.
Client Base Management can help you create capacity for growth within your existing level of resources, and help you focus on your best clients, as measured by your own methods of applying the three R’s.
Who tends to get this right ? Airline frequent flyer programs for one. The best programs reward their most frequent and highest paying travelers the most, they work at their relationship with them through their frequent flyer benefits, and they find ways to encourage those loyal flyers to refer others.
Who gets it wrong ? Mobile phone companies. I’ve rarely seen such a terrible customer model as prevails in this industry. They ignore their highest paying customers once they lock them into contracts to ensure their “loyalty”. They then focus all their efforts on stealing customers from their competitors. A race to the lowest common denominator, and guaranteed to stifle innovation.
If I had the time (in an alternate universe!), I’d love to focus on launching a telecomms start up that was focussed on doing whatever it took to make their customers insanely fanatical evangelists. I think there is a gap in the market there you could drive a Mack truck through. Meantime, take a look at GiffGaff.com and see what you think of their business model (thanks to Scott Allison for pointing them out to me), and then smile when you realize that they themselves are simply a “test lab” for a traditional telco in the UK, O2.
Finally, and back to airline frequent flyer programmes. You don’t have to be George Clooney in “Up in the Air” to get excellent customer service, just being an airline elite frequent flyer gets you special treatment. Outside of those with such privileges, we all sometimes feel like ”The Oatmeal” :
