Existing Customer Management 101
Playbook for monetising and engaging existing customers
Welcome to the mini-course Existing Customer Management 101!
In this special edition, you will find excerpts from ten of my previous articles with some of my best ideas on how to engage, grow and retain existing customers. This content will teach you the basics of driving customer value and unlocking the growth potential of your existing customer base.
Did you know that retaining and growing existing customers is 5-25x cheaper than acquiring new customers? Or that most of a company’s revenue often comes from the existing customer base?
Despite this fact, many companies rely on new sales to keep growth high and try to outgrow customer churn, whilst their post-sales environment is uncharted territory.
Wake up and smell the coffee.
1. Customer value is about value — to the customer
The above may sound blooming obvious but you would be surprised how many people think that Customer Value relates to the value the customer generates for the company.
Customer value can be described as the perceived worth of your product/service to the customer by considering the associated benefits it brings, less the costs that the customer incurs.
Plans based on the wrong assumptions can lead to flawed outcomes or failure. Customer value leads to company value, but not necessarily the other way around.
Focussing on trying to make money over making meaning for the customer is the mistake that everybody else makes.
2. Know where you are going and why
When you start out, you’re facing a blank canvas and the range of options is wide-open.
Before you spring into action and decide on the next business initiative, ensure that plans are grounded in the needs, wants and preferences of your customer. Not your own.
Validate the assumptions that underpin your plans and run customer research and capture insights from surveys and customer feedback.
Creating fewer, better and highly relevant customer offerings and interactions is a sound approach to customer management.
Less is more.
3. Accelerate growth by reducing customer churn
Take a close look at the end of the customer journey, which is the customer attrition / account closure stage.
This is of interest because existing customer bases often suffer from what I call the ‘Leaky Bucket Syndrome’.
Customer retention is often thought of as a defensive activity and not a money-spinner, although what is less obvious here is that it is fully possible that customer attrition is the mirror image of customer acquisition.
The reasons why customers decide to leave and close their accounts often expand far beyond price. Your next task is to capture the different reasons for leaving, identify the underlying root causes and track the data over time to gauge volumes and trends.
— Want to Accelerate Growth and Value? Slow Down to go Faster
4. Start a customer retention programme
Develop retention solutions by looking at main reasons for leaving (by volume and value) and put in place an offer and/or action that solves for the underlying root cause.
Here are some examples of what this might look like:
“I use another service for this” → Match or exceed competitor offering
“Product doesn’t meet my needs” → Different product - downgrade or upgrade
“I signed up, but never used it’’ → Resell product and assist with onboarding
In addition to establishing an effective retention programme that you can now performance measure and improve over time, you will want to make sure that you also capture qualitative feedback from customers and relay those insights to other business areas (e.g. Product and Sales teams) which will creative a virtuous circle of client and business performance.
— Retention & Renewals: 6 Simple and Actionable Steps to Crush Customer Churn
5. Maintain a balanced approach
Reflect on the nature of your business initiatives for the year ahead. Are they:
A list of revenue-making projects that add up to one overall income target?
Customer experience and service improvements with barely no numbers attached?
Or perhaps something in between?
Carefully consider the balance between your ‘Push’ and ‘Pull’ initiatives (i.e. Promotions vs Engagement) and what this means from the client’s perspective.
This works a bit like Yin and Yang from Chinese Daoist thought where striking the right balance between these opposite, contrary forces achieves harmony.
— Are you Doing Things Right or Doing the Right Things?
6. Avoid common pitfalls
Good customer engagement strategy also includes knowing what to avoid doing.
Be aware of some of the most common pitfalls in existing customer management and consider what this means for your own business:
One-size-fits-all customer solutions
Cutting down on Customer Support
The biggest customers get all the attention
No future vision for existing customers
— 10 Pitfalls in Customer Value Management
7. Work and win as a team
Sadly, many good business improvement ideas and customer initiatives never get past the initial idea stage.
A challenge for practitioners in the fields of Customer Experience, Customer Engagement or Customer Success will be to navigate the fact that these projects often come with a measurement problem.
In practice, this means that what can’t clearly estimated in terms of financial or intangible benefits mean that initiatives end up at the bottom of the prioritisation list.
Initiating and delivering change — especially in large organisations — have been resembled by some to a game of Snakes and Ladders.
By pairing up with like-minded colleagues and stakeholders in your organisation, you’ll stand a greater chance to overcome these navigational challenges as a team.
— Customer Transformation is a Team Sport
8. Complaints are a goldmine in disguise
You might have come across the complaints ‘iceberg analogy’ before which states that only 10% of the iceberg is visible and 90% of the mass lies hidden beneath the waves.
The business learning from this would be that in addition to the customers that filed an official complaint, there might be far more customers who are also dissatisfied but have not voiced any concerns.
Customer complaints is a source of valuable customer feedback and a learning opportunity for the company. It is an opportunity to develop and grow as a company by making the products and services stronger and better.
— Complaints, Complaints, Complaints
9. Meet your customers at the coalface
You don’t need to spend big bucks on buying customer research from external providers, when everything you need is already right on your doorstep.
An organisational challenge is that as people become more senior, they become further and further removed from customers.
Leaders, listen up!
When was the last time you met with one of your customers face-to-face?
Stood side-by-side to your sales staff and served customers at the shop floor?
Dealt with a complaint from a disgruntled customer?
By ensuring that your non-customer facing staff gains regular access to direct interaction with customers, the level of organisational understanding of the issues that customers face will increase.
Funnelling this insight and information to the right people and decision-makers is going to improve customer-centricity and enable better decision-making.
— Meet Your Customers at the Coalface
10. Improve customer fit
Most business projects and customer campaigns don’t fail because a lack of:
budget
resources
commitment
They fail when businesses are trying to solve for problems that don’t really matter to customers.
Therefore, it’s a wise choice to start with a discovery phase before jumping into planning & execution mode and speak to customers about your prospective idea first.
If you got a lot of time and money on your hands, you can go down the route of carrying out structured customer research such as surveys, customer interviews and co-creation workshops with customers.
In case you don’t — a light-touch version of the above is what I call the ‘Customer Test Lab’.
This is a series of rapid-fire tests and questions to customers where the general idea is to fail fast. This is basically the no-budget version for quickly eliminating ideas that don’t have a good customer fit to narrow down and focus on those ideas that do.
— Stop your Business Projects from Failing by Improving Customer Fit
A really solid roadmap to Scaling Customer Value Jens! Thank you for linking these amazing guides.
OMG! The amount of times I have actually heard company leaders dismiss the value "smaller" existing customers in favor of the ONE large customer or the current year's sales pipeline is DISGUSTINGLY HIGH