By TOM WOODCOCK
The challenge in developing a customer base is determining which customers represent the best possible opportunity. Which pay the best? Which are easiest to work with? Which are the least demanding? Companies market themselves to death trying to attract these types of customers.
That’s the core problem – thinking all you need to do is attract the best customers. It’s kind of like the woman who only seems to attract loser men or the man who only seems to attract needy women. That’s a lot of people.
Available, perfect customers are virtual unicorns. The key is you don’t attract them. You build them.
This is the secret in building a customer base that is loaded with grade A clients. As with any desire to get ROI in a sales effort, you must ask the question: What am I willing to invest? Too many companies make a passive effort trying to gain business and sales. They sporadically meet with clients, often only in relation to an upcoming project. This is not enough to build a quality customer base. Your investment of time and resources is imperative to achieving this end. Cutting corners or limiting customer contact can reduce the depth of your relationship. Merely evaluating good customers from poor customers is not enough. If a customer doesn’t feel you’re invested in the relationship, he or she can just as easily use your competitor.
The greater the depth of relationship, the stronger the bond of trust with your clients. The greater the trust, the more willing the customer is to accept your interpretation of project scope and pricing. Clients believe you will be fair and look out for their best interests above yours if they trust you. Establishing this level of trust directly impacts your bottom line.
How do you achieve this level of relationship? It’s not as hard as you think.
First, set aside time for the lunch, coffee and happy hour encounters that sometimes seem fruitless. During some of these, don’t even talk about a project or discuss business at all. Just laugh and discuss your favorite team’s season. Ask about their children’s achievements. (Black and white thinkers see this as a colossal waste of time; hopefully those people work for your competitor.) Invest in developing a friendship beyond a project-based relationship. If you do, when a project does arise, you’re the go-to in your area of expertise. If you’re not taking the time to invest in these encounters, you’ll never be considered more than a viable supplier. That’s what most contractors are to their customers.
Second, budget resources to entertain and recognize your customer base. People still appreciate a good lunch meeting, round of golf or a game. (I can hear the CFOs out there sighing in frustration. “Money wasted so sales personnel and customers can go play. What an extravagance.”) I’ve faced this my whole sales career. I even do with my staff now. If I hear one more, “I hope you had fun” in that condescending tone I’m sure many of you have heard, I’m going to snap. Yes, we did have fun. Lord knows, you wouldn’t want to have fun with a customer. Why on earth would you want to share positive life experiences with someone who can give you business? The last thing you want is to spend $100 on a client that can award you thousands or millions of dollars in contracts. This isn’t a license to abuse the privilege, but let’s get past the petty jealousy. We’re going for significantly higher and deeper levels of relationship here. That takes a greater investment. You get out what you put in. It’s that simple.
Third, you need the support of staff and company management. They need to realize you’re aiming for a uniquely deep customer relationship. They need to want that to happen and be willing to do all that is feasible to make that happen. This means assisting in processing paperwork, capturing information and performing with a level of excellence. This can free up sales agents to truly dive deeply into their customer relationships. If all hands are on deck in supporting the sales effort, results traditionally follow. An internal team that is mature enough to understand the need for a sales team to have the space and support to graft customers into the fabric of the company will reap tremendous benefits.
The challenge for many companies is adopting a sales culture that gives sales relationship development its proper priority. Allowing sales personnel to actively pursue relationship opportunities displays a degree of sales maturity not commonly seen. The construction industry isn’t known for this type of sales acumen. The pressure of bidding drives the transaction toward price. This negates the role of relationship and creates a level playing field, regardless of a contractor’s competence or integrity. Contractors would like customers to decide on these factors over price but don’t give enough attention to developing relationships to overcome the force of bidding. Securing premium customers is never achieved through pricing formats.
I’ll often hear one contractor say how much it loves working for a particular customer while another says it’ll never bid that same customer again. How is that possible? Well, the most dividing factor between those two perspectives is simply the level of relationship development. If you have a deep connection, communication lines are clearer and issues are resolved quickly. The customer doesn’t want the contractor to absorb a loss and will work to find an amicable solution to a problem. Those with less or no relationship will be treated more abruptly, and the customer will tend to protect its own interests. Often the customer is blamed, when in reality the contractor didn’t invest in developing that relationship. Many contractor employees whose responsibilities include sales also have other important roles. Whether it’s project management, estimating or even administrative needs, these all eat away at sales focus. It’s difficult to be impactful in sales when your attention is spread over so many areas. Once a project starts, the opportunity to work a strong sales effort diminishes.
Cultivating premium customers is the responsibility of those doing the selling. Putting the onus on the customer to be a premium client is a reverse rationale. A company that makes a conscious decision to invest in deep relationship development will see the loyalty and commitment it longs for from its customers.
Those who choose not to make that investment will battle the low-bid game going forward.
Tom Woodcock, president of seal the deal, is a speaker and trainer for the construction industry nationwide. He can be reached via his website, www.tomwoodcocksealthedeal.com, or at (314) 775-9217.