Title: Improving Business Relationships
Created: jan 23, 2014
Description: Fishbowl CMO Kirk Tanner explains the importance of being consistent and using communication channels wisely to build strong relationships with customers.
Welcome back to Whiteboard Wednesday. I’m Kirk Tanner, Chief Marketing Officer at Fishbowl, and since it’s January we’re gonna continue our conversation about New Year’s resolutions. And this week we’re gonna talk about improving business relationships.
We’ve got a nice little drawing here with your business on this side, this bridge, and our customers right here behind me. But we’re gonna start on this side over here. We wanna build this bridge, and we’re gonna start out with making some connections.
One of the ways that we can do this is by using email effectively. There’s a lot of emails that you can be sending to your customers that are very acceptable. Those might be special offers or promotions, but they can also be things like when you ship or when a customer orders, you’re sending confirmation. So they order, they get a confirmation email that that order has been received. You ship it; they get a confirmation that you’ve shipped it. But also it’s nice to get a confirmation email back that they’ve actually received the product so that you know your customer got what they ordered.
Another nice connection is social media. It’s a way to communicate with your target audience in a way that they can kind of interact and build a good relationship with you. But these are the core elements of building this bridge.
Then we come down to committing, and you’ll notice we’ve got the blue bolts here. Committing is all about making sure that what you do for your customers is on time and the quality of the products that they’re getting is the quality of products that they’re looking for. And this is gonna be very important to repeat business, and we’re gonna talk about that a little bit more here in a second.
But finally in building this bridge we want to make sure that we’ve got this wrench over here and that we’re constantly compensating and making adjustments so that this bridge is always as strong as possible and functioning.
Some things that can go into the compensation are things like your history and pricing. Now, if you’re running your business and you’re doing these things and managing all your inventory manually, this can get pretty labor-intensive. It can be hard to have the information you want when you need it.
If you’ve got an automated system, all these things, you know, the email stuff, can be happening in an automated fashion, making sure that your on-time deliveries and your quality is there. You’ve got all of that data at your fingertips, you know, the history and pricing; it’s all there in an automated system. So if you’re doing this manually or trying to do this manually you might wanna consider moving over to an automated system to build these relationships and keep this bridge strong and healthy.
Now, let’s shift to the other side here. Our primary focus here is we wanna make sure that we recognize the value of an existing customer. This is according to Bain & Company consulting. Poor service is the primary reason why customers leave a business – four times more likely to defect because of poor service.
Now, an interesting point that they make is that 91 percent of unsatisfied customers simply walk away. They don’t say anything to you, and so it’s really important for you to have this bridge and all that information that we talked about so that you’re monitoring these customers because you don’t want them walking away. And if they’re not saying anything and if you’re not paying attention, you don’t know this is happening.
So this new vs. existing. It’s five to 20 percent likely that you’re gonna get a new customer when you’re reaching out to prospects, but you’ve got a 60 to 70 percent likelihood that an existing customer is going to repurchase. So, looking at this, this bridge becomes really critical to driving your business and making it successful.
And then the final point here is that new customers are gonna cost you six to seven times more to obtain than your existing customers. So now if we come back over here to your side of the business, all of a sudden these things that you’re going to do to make sure that you’re moving inventory out to those customers becomes really important because you want to make sure you keep your customers happy.
The key here to building this business relationship is being consistent. Make sure that those deliveries and the quality, your communications and your compensations and adjustments are all happening in a way to keep this traffic running smoothly. If you do that, you’ll move plenty of inventory to make sure that your business is successful and your customers are happy.
That’s it for this week’s Whiteboard Wednesday. Join us next week. We’ll be talking about getting rid of bad practices. Thanks.