January 4, 2013
EDMONTON, AB, Jan. 4, 2013/ Troy Media/ – Every seasoned businessperson should know that it’s easier and more cost effective to do business with those who already know you and have purchased from you than those who haven’t or don’t even know you exist. So why do companies get so hung up on seeking out new customers rather than focusing on existing ones?
When we buy a product or service, all too often, the next time we have any contact with the company, if any, might be if we need more or perhaps see an ad. And sadly, sometimes it seems that the great offers are targeted towards ‘new signups only’. By ignoring the bird in the hand, companies are taking a more difficult path. Consequently they are missing a huge opportunity of not only gaining repeat business from existing customers, but leveraging more than just their customers’ purchasing power.
Bill Lee, in his book, The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset, (Harvard Business Review Press, 2012), makes his case as to how companies overlook the value of customer relationships as growth opportunities. In fact, he makes some compelling arguments and illustrates how customer advocates can add to your bottom line and become your unpaid sales force and more.
In the book he recalls how Marc Benioff founder, CEO and Chairman of Salesforce.com, wanted to compete with the likes of Oracle and SAP, the big players in the CRM (Customer Relationship Management) market. So rather than just test products on customers, Benioff had them help design them. Makes sense, since they were also the users. He went further. They would help brand, market, sell and also improve it. He took them along on city tours and and in essence, Lee says, turned them into Rock Stars.
Now that might be an extreme case, but it won’t happen if you and your clients are indifferent to each other. Lee says it’s imperative to look at developing and looking for a return of relationships rather than a margin on a single transaction. And by building those relationships, you can turn you customers into raving fans.Those fans are advocates, who start a conversation and will tell the world, whether face to face or through social media how great you are.
‘The referral value of customers is greater than purchasing value,’ says Lee.
Isn’t that the truth?
Think about it. When you want to buy something, you’ll do your homework; you’ll check out the company, you’ll look on-line and do your research. However, chances are you’ll ask someone you know and trust. It might be a friend or family member or it might even be someone with authority. They might be local or, more likely today, somewhere out in cyberspace – Facebook, Twitter, Amazon or maybe even a review site. If the responses are positive and in some cases raving, these unpaid fans can help you make the sale.
The book illustrates how Advocates often go beyond waving the flag. Fans may also write articles, provide references and even speak on your behalf. But that unpaid sales team goes beyond just advocates.
Influencers, experts or authorities who typically take on a neutral or objective view, can also contribute to your bottom line. They can also do what advocates do but are not necessarily customers: they can also provide opinions, interviews, commentary and articles in industry publications. Look what happens when Oprah says that she likes something.
Beyond that, Lee says, are Contributors. These are people who provide insight, knowledge and services, quite often for free. They can offer feedback on improving products and input on designing new ones. They can even provide service and support to others, which might include information, funding and even new products themselves. Just think of a third party iPhone app developer. The more apps there are, the better the iDevices look.
So why would people bother if they’re not getting paid? For many reasons: Some might just be passionate about a product or service and want to tell others. Think Apple ‘Fan boy’. Others may want to help improve a product or help lower it’s design cost. It might help them in their business or perhaps there may be a perk, like samples or advanced preview of new products.
Whether you have a large sales force or not, isn’t it great to be able to get a little extra help from a very enthusiastic unpaid sales team?
But all of these wonderful things don’t happen by themselves. You need to create an environment that fosters Advocates, Influencers and Contributors. You need to be open, transparent and willing to go where they are and be willing to look for them.
The book can help you do that and more. It’s full of anecdotes, case studies, examples and illustrations. It will give you a different perspective on how you can transform your existing customers, tap into their hidden wealth and create more win-win relationships.
It’s obvious that this book is directed towards the senior marketing executives in larger organizations and the publisher actually confirmed that. Regardless, most of the concepts are relevant and directly applicable to SME (Small and Medium Enterprises). In fact, you’ll likely know most if not all the companies mentioned and it’s well worth the read. I guarantee you’ll find some real surprises along the way.
Did you know that Microsoft successfully created an MVP (Most Valuable Professional) program for influencers who ultimately helped them penetrate and gain market share where they didn’t speak the language?
The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset, Harvard Business Review Press, 2012, 220 Pages. It’s available in hardcover and Kindle Edition at Amazon.com
Greg Gazin is a Tech Columnist, Small Business and Technology Speaker and Senior Editor at Troy Media. He can be reached at Gadgetguy.CA on Twitter @gadgetgreg or you can find him on Empire Avenue at (e)GADGET1.
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