At certain predictable points, customers start thinking about leaving you for someone else. How to find those points and intervene.
In the last post, I pointed out that it was more important to deepen your connection to your existing customers than to spend a lot of time and money trying to figure out why certain customers left.
That’s not to say that you shouldn’t care about losing customers. Customer attrition and churn can kill your bottom line. But once customers are gone, they’re gone. The best way to hang on to them is with a process I call “closing the backdoor.”
The winning game is to own your customers for life. To do that, you need to anticipate, meet, and try to exceed their needs and their expectations.
The key word here is “anticipate.” We now have the tools and data to totally manage our customer relationships--if we invest the time and money, and if we know what we’re looking for. Your job is to monitor your customers’ progress and jump in at the appropriate juncture to make the next connection and the next sale. You never want the customer “to come up for air,” because once he or she reenters the marketplace and starts shopping around, your job becomes a million times harder.
So how do you know when to act, and how do you preempt or intercept the customer at exactly the right time in the relationship?
The answer is actually easier than you would think, because every customer will move through the same cycle. You just have to understand and learn how to measure and manage these cycles.
To my mind, this is the most valuable chart you will ever see. Yes, it applies to your customers, but it also applies to your current relationship or marriage and to every other significant personal connection you will ever have.
The trick is to consistently get your next offer in front of the customer somewhere just before “Disenchantment” so that you can glide into “Receptive” as the only horse in town.
Below, we see this same phenomenon from the point of view of an automobile dealer. At the crossover point, the customer’s car is worth more than his or her remaining loan balance. For the car dealer, this is the ideal time to make a new offer. The consumer can turn in his or her old car, get a brand-new car, and get a brand-new loan repayment book to go along with it.
Why is this compelling to the customer? Because in virtually every case, the customer can be told that his monthly payments will remain the same even though he or she will be driving a brand-new car. Plus, there’s no salesman to deal with, no time wasted negotiating, no anxiety about getting a fair deal or a fair trade-in, and, of course, from the dealer’s standpoint, there’s no competition.
These cycles are going to vary by transaction and by industry, but the underlying principle still holds. Some of the variables that impact the types and durations of the cycles include:
The size and financial or emotional importance of the transaction
How often the transaction occurs and the other interactions the customer has in between transactions
How easy it is for your customers to go to a competitor
Regardless of these factors, there are similar cycles to be identified, tracked, and managed in every business. Properly managed, they’re the keys to closing the backdoor and keeping your customers for life.
HOWARD A. TULLMAN is the General Managing Partner of G2T3V, LLC – Investors in Disruptive Innovators and of Chicago High Tech Investors. He is the former Chairman and CEO of Tribeca Flashpoint Media Arts Academy. Over the last 40 years, he has founded more than a dozen high-tech companies. @tullman