How To Unleash A War Of Attrition On Your Customers
I recently asked a friend, Dave, how his company was faring in the current economic downturn. When Dave replied that sales were below projections, I asked him about his CEO’s strategy for coping with declining sales revenue.
Dave told me that he didn’t think the CEO had a strategy. Instead, Dave told me that the CEO simply instructed the sales team to “Go out and round up as many new customers as quickly as you can find them.”
Dave is right. Rushing out helter-skelter looking for new customers isn’t a strategy; it is an ill-advised sales tactic born out of desperation and doomed to failure in an unforgiving economy. Worse, this predictable, knee-jerk reaction to slowing sales isn’t likely to help solve a sales revenue shortfall and may, in fact, contribute directly to vanishing profits and a company’s demise.
Every sales organization should plan on losing about 20% of its customers each year through natural attrition. Seeking out new customers, then, should be a natural part of an overall sales revenue strategy.
Dave’s CEO, however, in mandating that his sales team seek out and convert as many prospects into new customers as quickly as possible, has unwittingly unleashed a war of attrition on the company’s current customers. Here’s why:
Sends The Wrong Message To Customers
Is the CEO worried that his sales team will unearth customers who may be higher credit risks than the company’s current customers? Should he be worried about attracting customers that are unprofitable because they only buy when prices have been reduced, usually demand high-cost, extraordinary services that drain the seller’s resources and cannot be counted on for long-term loyalty?
It's Time To Get Customer Intimate
The volatile economic milieu in which all companies today find themselves immersed screams for a strategic approach to protecting customers and expanding key customer relationships. If ever there was a time to get customer intimate, it's now.
Corporate board rooms need to reverberate with the sounds of brainstorming sessions devoted to discovering how best to add value to key customers in perhaps their greatest time of need in many decades.
The alternative, unfortunately, is to succumb to the temptation of a knee-jerk reaction that alientates customers and employees, and invites competitors to hunt your best customers with your unintended cooperation.
Listening With Empathy
Last month I talked about superb listeners who I know about or know personally. This final article on listening focuses on what some superb listeners do that distinguishes them from all the rest.
If you carefully watch some superb listeners you will see that while they exhibit all the characteristics of superb listening, they also listen with empathy. This ability makes them a rare breed.
In his book, How The Mind Works, Professor Steven Pinker of Harvard reveals that “The body is the ultimate barrier to empathy. Your toothache simply does not hurt me the way it hurts you.” Yet somehow superb listeners who listen with empathy transcend this limitation and give the impression of feeling the pain from another’s aching tooth.
Listening with empathy seems to come naturally to some superb listeners. They don’t rehearse, and they don’t prepare to listen with empathy – they just do it naturally. It’s involuntary, like that certain involuntary look that appears on your face instantaneously, advertising your ancestral connections to your siblings, your parents and your grand-parents.
Making a conscious effort to convey empathy and sincerity while listening doesn't work. That effort telegraphs your intentions to the speaker, and it loses the sense of spontaneity and genuineness conveyed by those who naturally listen with empathy.
So, can anyone learn to listen with empathy? I think anyone can, but the process I recommend will appear counterintuitive to many people. To become a superb listener who listens with empathy first requires that I acknowledge that I do not listen with empathy. I may not like this reality, but it's a fact.
Once I've accepted this fact, I can then remain constantly aware of how I am listening during conversations. It's in that awareness, that attention to what I am doing, and not doing, that can bring about a transformation in the way I listen.
Those few among us who listen with empathy are somehow able to exude joy, excitement, sadness, anticipation, appreciation, acknowledgment, gratitude - whatever is appropriate to the conversation. In conversation, it doesn't get any better than being heard by someone who is genuinely interested in what we are saying, and who listens with sincere empathy.
Published Articles and Webcasts
Interested readers can access additional, current Selling Up articles and webcasts on some notable websites, including CustomerThink.com and CustomerManagementIQ.com. These websites focus on customer management and offer compelling articles and commentary written for E-Suite executives.
Sends The Wrong Message To Customers
Does Dave’s CEO actually think his company’s customers won’t notice the lack of attention paid to them as the sales team runs all over the globe, digging up greener pastures in search of new customers? Is he worried that his customers, the ones that helped pay his bills and generated profits for his company in the days-of-plenty, may resent being ignored or abandoned in difficult times?
Sends The Wrong Message To Employees
Implied in the CEO's mandate to the sales team is "let's abandon any notion we may have had about cross-selling and up-selling in our customers' organizations." The sales and sales support teams, along with everyone else in the company, now knows that current customers are expendable, and that taking care of customers is no longer a corporate priority. The CEO's message to company employees, though perhaps unintended, is that it's OK to neglect, even to ignore current customers as increasingly scarce resources are allocated to the rush to acquire new customers.
Sends An "Open Season" Message To Competitors
Another unintended consequence of this flawed sales tactic is the "Open Season" sign the company's sales team hangs above customers' doors as they start hunting for new customers. Any capable and able competitior will surely seize an opportunity to add value to customers who are neglected or ignored by their primary vendor.
Worthy compeititors will also likely sense desperation and a lack of creative thinking when they see a competitor invoke a knee-jerk sales tactic that must, because of the limits of available time, ignore key customers.
Implied in the CEO's mandate to the sales team is "let's abandon any notion we may have had about cross-selling and up-selling in our customers' organizations." The sales and sales support teams, along with everyone else in the company, now knows that current customers are expendable, and that taking care of customers is no longer a corporate priority. The CEO's message to company employees, though perhaps unintended, is that it's OK to neglect, even to ignore current customers as increasingly scarce resources are allocated to the rush to acquire new customers.
Sends An "Open Season" Message To Competitors
Another unintended consequence of this flawed sales tactic is the "Open Season" sign the company's sales team hangs above customers' doors as they start hunting for new customers. Any capable and able competitior will surely seize an opportunity to add value to customers who are neglected or ignored by their primary vendor.
Worthy compeititors will also likely sense desperation and a lack of creative thinking when they see a competitor invoke a knee-jerk sales tactic that must, because of the limits of available time, ignore key customers.
It’s Not Good For Profitability
What makes Dave’s CEO think that any new customers the sales team brings to the company’s table aren’t immune from the challenges this economic melt-down is presenting to virtually every company in all industries worldwide?
It's Time To Get Customer Intimate
The volatile economic milieu in which all companies today find themselves immersed screams for a strategic approach to protecting customers and expanding key customer relationships. If ever there was a time to get customer intimate, it's now.
Corporate board rooms need to reverberate with the sounds of brainstorming sessions devoted to discovering how best to add value to key customers in perhaps their greatest time of need in many decades.
The alternative, unfortunately, is to succumb to the temptation of a knee-jerk reaction that alientates customers and employees, and invites competitors to hunt your best customers with your unintended cooperation.
Listening With Empathy
Last month I talked about superb listeners who I know about or know personally. This final article on listening focuses on what some superb listeners do that distinguishes them from all the rest.
If you carefully watch some superb listeners you will see that while they exhibit all the characteristics of superb listening, they also listen with empathy. This ability makes them a rare breed.
In his book, How The Mind Works, Professor Steven Pinker of Harvard reveals that “The body is the ultimate barrier to empathy. Your toothache simply does not hurt me the way it hurts you.” Yet somehow superb listeners who listen with empathy transcend this limitation and give the impression of feeling the pain from another’s aching tooth.
Listening with empathy seems to come naturally to some superb listeners. They don’t rehearse, and they don’t prepare to listen with empathy – they just do it naturally. It’s involuntary, like that certain involuntary look that appears on your face instantaneously, advertising your ancestral connections to your siblings, your parents and your grand-parents.
Making a conscious effort to convey empathy and sincerity while listening doesn't work. That effort telegraphs your intentions to the speaker, and it loses the sense of spontaneity and genuineness conveyed by those who naturally listen with empathy.
So, can anyone learn to listen with empathy? I think anyone can, but the process I recommend will appear counterintuitive to many people. To become a superb listener who listens with empathy first requires that I acknowledge that I do not listen with empathy. I may not like this reality, but it's a fact.
Once I've accepted this fact, I can then remain constantly aware of how I am listening during conversations. It's in that awareness, that attention to what I am doing, and not doing, that can bring about a transformation in the way I listen.
Those few among us who listen with empathy are somehow able to exude joy, excitement, sadness, anticipation, appreciation, acknowledgment, gratitude - whatever is appropriate to the conversation. In conversation, it doesn't get any better than being heard by someone who is genuinely interested in what we are saying, and who listens with sincere empathy.
Published Articles and Webcasts
Interested readers can access additional, current Selling Up articles and webcasts on some notable websites, including CustomerThink.com and CustomerManagementIQ.com. These websites focus on customer management and offer compelling articles and commentary written for E-Suite executives.
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sustainable
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