Attrition Can Kill Your Sales

Filed Under (OP Sales Training) by Don on 07-02-2007

I wrote previously about customer loyalty and it remains a consistent problem for companies and employees who try to create and cultivate long-term customer relationships.  Refer back to my earlier post regarding the relationship and retention process and you will understand the importance of this approach.  Customers today have more leverage in the market in any category with multiple products, regardless of the industry.  This makes it even easier for the consumer to choose one over the other.  Considering the impact of the internet on business, the consumer has more information available to them today than ever before.   This allows them to make informed decisions on the companies they deal with and purchase from and directly effects the potential relationship with that company.  The most serious culprit behind the loyalty and retention problems are tied to companies’ lack of awareness or attention to the customer experience.  This ingnorance increases your attrition.

We also get caught up in pricing initiatives to get our buyers attention.  We assume their sole issue is price and immediately jump in and say we will meet or beat the competitions price without spending time to identify the real issue.  I’ve often made the same error.  Price is an excuse, not the reason they are not buying.  I hear the same thing every day, “our prices are not low enough”.  If you continue to reduce your price you are telling the customer that there is a better and cheaper way to do business, not to mention your commission check will suffer from the lower margins.  Always lowering the price tells consumers that you cannot add more value therefore you have reduced the competition to price, not service.  The customer may now suspect that you are overcharging them on a consistent basis and will shop you on every product causing a further deterioration in your margins.

I think the office products industry has largely ignored their attrition rates and especially now with the advent of online ordering.  It is more challenging than ever to create a unique experience among consumers who shop online and do not have the presence of a professional representative in their office for valuable face time.  If you are not talking or visiting your customer that is regularly buying you will have a difficult time recognizing the signals of potential defection.  It is necessary for you to notice the signs of attrition before they quit buying.  Be proactive when the warning signs occur and actively engage the customer to identify what changes need to be made.  These signs could be a significant loss of revenue, price shopping, return problems, missed payments and service inquiries.  These are solid indicators the customer is not content with a product or service and there is a high degree of probability that relationship will cease.    If that happens don’t immediately write-off the account.  Maximize the process by asking the customer why they stopped buying and leverage that information into your selling and or marketing processes.  Learn from your mistakes and recognize the need for change where necessary and make positive steps to prevent that from happening again and you will decrease your attrition levels.  What process do you have in place to contact your customers on a regular basis?  Do you have more than 300 customers?  If so, do you see all of them at least once per month?  If you don’t, then give them to someone that can because you are doing more damage than good.  Even with 300 customers, in an average month of 21 work days you will need to visit 14 accounts per day in order to see them all.  Do you really think you can effectively call on this many customers in one day and demonstrate any degree of sincere relationship building?  You will be so hurried that your visit will be no more than an insult on the customers time.  I would rather have 15o really good customers than 500 customers when I know good and well there is no way I will see them every month or even every two months.  I’m wasting their time and mine in a fruitless effort to be greedy and ineffectual.  Remember the 80-20 rule?  Eighty percent of your business comes from twenty percent of your customers.  That’s because you don’t have the time to see 100% of your customer base.  Do yourself and your customer a tremendous favor, give the account to someone who can effectively build the relationship.

Utilize training for your CSR’s and other associates to make sure the customer receives the most current, relevant information.  The customer interaction with your CSR’s in another critical part of this attrition reducing process.  Your CSR’s must have current information regarding the customers account.  Detailed history and purchasing requirements are a must-have in order for the customer to feel appreciated and respected.  If you have a CRM package available use it everyday, document everything, no detail is to small.  If you don’t have a CRM package or software, get one today!  No excuses, I will not accept “I don’t have time to enter all that information”.  That is nothing but C.R.A.P.  Criticism, Rejection, Antagonism, and Procrastination.  Fact is you can’t afford not to make the time to keep an accurate and reliable history of all your customer contacts.  Have the CSR’s take equal responsibility in the customer experience.  They are your front-line defense, utilize this tool at every step in the sales process.  Do not ever ignore or take for granted the importance your CSR plays in maintaining the customer and creating the experience.

A 2006 Accenture survey of 1000 U.S. consumers revealed that forty-six percent stopped doing business with a company as a result of poor service.  Respond quickly to customer questions and/or requests for service.  Avoid processes that make it difficult to do business with you.  Make your company and yourself easy to contact via phone, e-mail, or web.  Offer reliable answers, be honest and responsible and remember nothing travels faster than bad news.  The independent office dealer thrives on service while the ‘big-box stores’ service continues to degrade.  Unless you give stellar service and do an outstanding job of meeting the customer needs you will not keep your customer and your attrition rates will soar.

Leave a Reply

You must be logged in to post a comment.