Achieving Profitable Customer Relationships

The best way to achieve a profitable relationship is to have a long-term relationship, because if you maintain a customer over the long haul – particularly in our business model, being a hosted service – you make much more money. Longevity is clearly an important element.

You have to deliver value to these people and keep them as happy customers – referenceable customers – every day. You also have to have a win/win situation with a customer. There are certainly companies out there that don’t think enough about that. We think about it a great deal; we want to get value out of the relationship, but we are hell-bent to make sure that our customer is actually getting significant value out of it. So we focus a lot on what value we’re going to deliver to them, and we specifically work with them very early in the relationship to do the homework and make sure we’re in agreement as to what the expectations are. We always try to put things in writing so everyone understands the goals very clearly. Some customers aren’t exactly sure what’s possible, so we try to work with them to make sure that things become crisp.

Our sales team and our professional services team use a methodical, step- by-step process of literally creating spreadsheets with the customers to establish what their business goals are. I think too many companies simply approach their prospects thinking the exact same thing for every customer. This is a world where success comes only when you help a company meet its goals, not your own goals or an industry’s set of perceived goals. You must learn what the prospect is really about, what their business challenges are and what’s truly important to them. I often tell my team, “we learn nothing at home, and we learn everything in the field.” We drill down and work with the prospect to establish measurable goals such as increasing their sales of digital cameras by 25 percent, or their sign-ups on depository accounts by 50 percent, or the sale of cellular phone plans by 25 percent or 100 percent. In the financial markets, an internal goal at an organization like Wells Fargo, for example, might be to sign up a customer for seven products. When they sign up a customer for seven products, the likelihood of that customer being a very long-term customer is great. If the customer only signs up for one product, the likelihood of him or her being a long-term customer is pretty small. So their goal may be not directly dollar related; it may be the average number of products that a particular customer owns because they know that that directly translates into long-term relationships, and that’s what they’re trying to achieve.

Every thing we do has the same questions applied: What is it? What’s the measurement of success and by when? Then we drive to exceed these goals, all the time communicating with the customer what’s going on. If things change or look like they need to be adjusted, we rush in to communicate, even if it might be a challenging discussion. We want to always do things right and make sure the customer knows what’s going on. In our business, if we use established best practices with regards to our products, and the customer works with us to do that, then we achieve success. If the customer gets parties involved that sway us from our course, we stop and make sure that the business champion helps get the best practices back in line.

I believe the goal setting is the most important phase. You have to be brave with this because you have to deliver. Many companies that sell software shy away from it because it is so black and white. Our software is about selling products, and customer satisfaction, and good in-store experiences, and selling multiple products and cross-selling, but in the end you have to step up to some numbers and not just “this is nice to have.” I think “nice to have” software is a thing of the past, and any company that is selling “nice to have” software will be crushed in the new economy.

The keys to creating profitable customer relationships are (1) understand the customer’s business, (2) understand what they think they want to achieve with you, (3) confirm what the goals are and quantify them, and (4) deliver and keep delivering