There are two ways you can Add Value to improve your Client Retention
First off there are the traditional direct methods:
1 Direct Value Add
There are a whole range of areas where a supplier of products or services can add value to client relationships. There is of course the issue of striking the right balance between keeping a happy client and keeping a profitable client. The old adage of when something seems too good to be true (ie making super profits from a client outside of industry norms) in the vast majority of cases it is too good to be true. Sooner or later the client will find out that you have been exploiting them and the relationship will end on a sour note. You not only will have lost this client but also the benefit of any introductions that may have been forthcoming.
For ease of use I have put together a list below of ‘direct’ Value Adds that can be either given to a client with a view to developing your client retention strategy, or form part of a discussion when you are negotiating the terms of your agreement:
- Price reductions for increased turnover
- Enhanced service
- Direct point of contact
- Service level agreement
- Faster deliveries
- Service hotline
- Transparency – open book costings
- Price setting for defined period
- Bespoke service – let the customer design their own service or product
- We collect vs. you deliver
- We visit you for meetings
- Holding spares
- Offering on-site facilities, e.g. access to phone, copier, desk space, use of dining room, parking
- Use of your specialist equipment occasionally, for free or at reduced rate
- Access to your knowledge, experts, & reports you own
- Add-ons, upgrades, support contracts
- Free or reduced cost for training
Then we have the Indirect method of adding Value to customer relationships
2 Indirect Value Add
This is a more subtle, and potentially more valuable area of value add, where you adopt a policy of really listening to your customers, and picking up on their needs and concerns when you are in any form of interaction with them.
These issues can be from a wide range of areas, including:
A need for additional business management resource:
This could be anything from assistance with business strategy, a new project, an existing project that has gone wrong, a potential acquisition or assistance with some people issues etc etc
Additional or replacement finance:
This could be additional finance needed to fund growth, working capital finance or the securing of replacement facilities when the current funding agreement is coming to an end.
Cash flow pressures:
It may be that the customer is experiencing cash flow pressures due to late payment, a bad debt(s) or a decline in margins or turnover? This will result in additional pressure from creditors, often from HMRC or major suppliers, which could result in the failure of the business and the loss of your valued customer.
Summary
We all like to be put in contact with someone who can help with particular issues or problems. Especially when this introduction is to a trusted resource who will be able to immediately relieve any pain we are experiencing and work with us to restore or improve our previous situation. This is particularly the case when we are able to talk direct with the potential resource to establish for ourselves, without it costing us anything, to find out how they might be able to help.
For example…..
New roof on our house – an example of this ADDED VALUE is with a consulting engineer we are using at the moment who has been recommended by an architect friend. He has come out to see us and given us his professional view on how we should progess at no cost. This has proved incredibly valuable. We will be going ahead and using his services to assist in the management of our new roof. We are very grateful to our friend for introducing him and will be doing more business with him in the future.
If you have any comments on this article or would like to discuss any aspect of it please contact me at john.thompson@transcapital.co.uk or on 0845 689 8750.
John Thompson is Managing Director and founder of Trans Capital Associates
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