You know about ROI – return on investment, but what about ROR – return on relationship?
As products and services become more and more alike your customers are no longer buying product leadership. They are buying a trusted consultant. Someone who helps them achieve their objectives and whom they can turn to for sound advice.
Your competitors will copy your product-based USPs at every opportunity, but the one ingredient they can’t replicate is the relationship you have with your customer.
Nurture it at every opportunity. Rather than just asking yourself ‘How can I win this business by the end of the day, week, month?’, ask yourself, ‘What could this relationship look like in 12 months? Or two years? Or five years?’
This is the partner element of consultative-partner selling. And whether you sell software, financial services, consulting or whatever, it’s a vital area. As a trusted adviser you need to be constantly coming up with new ideas, new ways your customer can improve their business results.
The software salesperson says, ‘I’m not here to sell you the latest application. I’m here to be your software consultant for as long as you are using computers. We’re in this together.’
The financial services salesperson says, ‘I’m not here to sell you a policy. I’m here to be your long-term financial adviser.’
Faced with decreasing product differences, a high trust relationship which brings the customer ongoing improvements, is your principal source of competitive advantage. People will even buy an inferior product from a superior relationship.
ROR pays dividends
Strong relationships promote customer loyalty and high repeat business. That usually means higher profits.
According to a survey by consultants Bain & Company, Leo Burnett, one of the largest advertising agencies in the world, has a near-perfect 98 per cent customer retention rate. The agency has grown to 63 offices worldwide without ever raising capital by issuing shares or borrowing heavily. Leo Burnett staff are among the highest paid in the industry and their prices are among the most competitive. That’s the tangible value of relationship building.
But what about companies that attract new customers with price discounts and special offers? Is that a good idea? Yes it works, but a customer easily hooked by a minimal price will just as easily abandon you at the next discount offered by your competitor.
If that’s how your firm attracts new business, focus hard on building a personal relationship with each new customer. That way they’ll stay.
Learn more about LDL sales training.