Why Are You Losing Business to Your Competitors? How to Manage Your Customer Relationships – Part 2

By: | February 23rd, 2014

In part one of Why Are You Losing Business to Your Competitors? How to Manage Your Customer Relationships, we looked at critical factors that could be affecting your client relationship and new business. Now let’s look at what you can do improve your client relationship and gain new clients at the same time.

Improving Your Qualitative Performance

Improving your Qualitative performance cannot be window dressing.  Smart customers will eventually see right though that and you will have lost all trust and credibility. So what are some positive behaviors that support your qualitative rankings?

  1. You bring passion to your work:
  • You dislike failure:
  • You dislike disappointing a customer – your customer or your customer’s customer.
  • There is no question on your commitment to do whatever it takes.

2.  You understand their corporation, organization and your contact’s goals and your proposals support the achievement of those goals.

3.  You can do what many people do and give them 400 reasons why it can’t be done or you can excite them by giving them the 1 reason why it can be done.

4.  Pass the credibility test — What happens after the phone call / meeting is over?

  • They can hope you do what you say or;
  • They absolutely believe you will do what you say

When a customer decides you are the best, the dynamics of the relationship will change. You have given your customer a reason to buy from you beyond just cost or price.  When a customer believes you are the best, it creates an opportunity for you to expand your market share and gain an emotional competitive advantage.

You are able to begin focusing on providing solution and not selling.  The relationship becomes more strategic and less tactical.  Providing a solution is strategic, selling is tactical. If you are viewed as tactical by your customer, they are thinking you can be replaced.

Now for the Scary Part

Humans have a wonderful ability to complicate almost anything.  Including why someone buys from them, or why they buy from someone else.  The fact is, there are only two reasons why ANY customer does business with us or why we do business with someone.  Forget everything else you believe – Trust me – there are only two fundamental reasons:

1. Because they have to: something is forcing them to deal with you even though they do not want to. This is the worst possible reason. You will never have a strategic relationship and the minute someone else comes along who can satisfy their needs, they will be gone and so will their business.

Think about a store you visit if you want a particular item. It doesn’t matter how much you dislike the store, the sales person, the location or price.  If you want it, you need to go there.  What will happen if another store opens up nearby, selling the same product.  You and your money will move.  Just like your customers will move.

2. Because they want to: This is what you want.  They had choices and they chose you.  This reason will allow you to focus on the creation of a truly strategic relationship focused on satisfying the needs of the customer.  You can stop selling and start solving, adding value beyond just being good at taking a purchase order.

Believe it or not, most sales and marketing professionals or the owners of small businesses have no idea why their customers really do business with them. Really knowing why is powerful, but it can also be scary.  If they are doing business with you because they have to, your business is at risk. You need to begin to focus on those behaviors or characteristics that will change them from “Have To” to “Want To”.  How powerful is that?

Competitive Advantage Verses Parity

When potential suppliers would make presentations to me, almost all of them would describe how doing business with them would give the company I worked for a “Competitive Advantage”.  In most cases, what they were offering I was already getting from the existing supplier.  What they were really offering was Parity.  So let’s define what Competitive Advantage means.

It means you are delivering to your customers something which gives them an advantage over their competition, meaning it will encourage their customers to buy from them.  When you present a customer with a real competitive advantage, it gives them the motivation and a reason to buy from you and not the competition. You are giving them a capability they can use to win or take business from their competitors.

This is why it’s critical for you to understand what their business or organizational goals are so you can frame your presentation around support of those goals or objectives. Presenting to a new or existing customer a real competitive advantage can be your best sales and marketing tool. 

Take Action

With a team of others who know the customers, list each of them on paper. Then do a no–holds barred, brutally-honest evaluation on why you think each of them does business with your company. Be prepared to defend your reasoning.  You can even ask your customer.  If they have a hard time giving you an answer, warning bells should go off in your head.

Evaluate what you have learned and take steps to develop relationship strategies for each customer.  Identify customers who may be at risk for special focus.  Measure the effectiveness of your strategies by establishing metrics to measure improvement.  The metrics can include hard data such as sales, quotes, awards or softer indicators of improvement by increased access to other decision makers or departments, visibility to new projects or unsolicited opportunities to quote or discuss new areas of involvement.

In today’s business climate, how effective you are in managing the relationships with your customers is critical to winning or keeping business. Using those relationships to better understand why they do business with you, learning about their business and organizational goals and then working to deliver to them a competitive advantage, can be the difference between winning or losing business.

If you want to grow your business, add to your sales and grow your bottom line, consider some or all of these approaches.  I can tell you from practical experience, when suppliers approached me using these strategies, they almost always won the business.

Bob is VP of Operations and Global Sourcing for a commercial sound and audio company, an author of the book, “Look Forward…A Father and Son’s Journey of Healing..” a keynote speaker sought after by corporations, universities and organizations to speak on topics such as; Supplier Customer Relationship Management, Leadership and Asia Pacific Sourcing. He can be reached at bob@bobdixonbooks.com

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