Why Are You Losing Business to Your Competitors? How to Manage Your Customer Relationships – Part 1

By: | February 19th, 2014

Managing Relationships

Are you managing your customer relationships or are they managing you? (Image Courtesy www.cyberdesignpk.com)

You worked every night for weeks preparing the proposal for a potential customer.  The presentation went great, there were some questions and discussions, but they awarded the business to a competitor.  In another case, you are losing business from a long term customer to a competitor and nothing you try is stopping the flow of business.

Too many times we take customer and business relationships for granted. It’s too easy to convince ourselves that our company, our service and products are the best and then ask, “Why would they go somewhere else”?  Or even worse, to depend on our belief a customer cannot move away from us. Thinking we are “bullet-proof” is dangerous and deadly to the long term growth of your sales to a customer or the long term health of your relationship with them.

Your company can have the leading technology or the best service, but if your relationships are sub-par to your competitors, you can still lose new business and put your existing business at risk.  Many times when all else is equal, business is won or lost based on the strength and quality of your relationships with your customers.

If you are focused on growing your business with a customer, then you have to work at it, every month, every week and maybe, every day.  The same effort needs to apply to relationships. Ultimately, you want to create relationships that:

  • Are robust and successful
  • Are models you can use with other customers or suppliers
  • Focus on satisfying the customer and, maybe, that customer’s customer.

If you commit to focusing on understanding how to satisfy the needs of your immediate customer and understand what they must do to satisfy the needs of their own customers and you do this better than your competitors, customers would be insane to not grow their businesses with you.

The key is “Better than Your Competition”. Assuming your product offerings are equal to your competition, the real competitive advantage you offer becomes the motivator and reason your customers will grow their business with you and not with your competition.

Time for a Check-Up

Because relationships are easily taken for granted when the perfect sales pitch is not working or when business is being lost, it’s time for a check up on your relationships and your skills and strategies for creating and managing them.

Your evaluation must start at the beginning with Trust. Why?  Because trust is the most important and fundamental ingredient in any relationship. Do your customers really trust you?  Do you trust them?  This is a tough question and sometimes it requires brute force honesty and discussion.

Why is Trust so Important?

Because without trust, there can never, ever, be a useful relationship.  The motives of each side will always be an issue and in question. Because of the mistrust, the relationship will never be strategic. It’s emotionally exhausting to have any relationship that is not based on trust.  There will be constant frustration, disagreement and bad communication.  As a result, there is a loss of focus on satisfying the needs of the customer.  Without satisfying their needs you cannot grow the business and without satisfying their needs better than your competitors, you will not keep the business.

Trust is just the beginning but remember this.  It can take months or years to build up trust and only seconds to lose it – usually forever.

Here are some other areas to review:

Do You and Your Customer Want Each Other to Be Successful?

Why is this important?  It will support a change in the focus of the relationship, from making the sale, to making the customer successful. Remember, if you are helping the customer be successful the orders will come.  Making this change in thinking will support the other changes you may need to make.  It will create the foundation for growth of the relationship and it forces you and the customer to work together.

Finally, the communications between you and your customer will start to change.  They will be more open, less cautious and will give you and the customer valuable insight.

Are You the Best?

Everyone wants to be the best at whatever they do. Unfortunately, you do not get to determine this. Actually what you think doesn’t matter very much because the customer is going to make this decision for you and they will use two pieces of information;

Quantitative Information

This is data-driven analysis looking at information such as availability, past performance, product technology and features, cost, reliability, supply chain capability and commercial terms and conditions.  More than likely, meeting these only creates parity between you and your competitors.  Don’t be fooled into believing all of those wiz-bang features of your latest product or service will be an advantage.  The customer may not care about them as much as you do.

Qualitative Information

These are emotionally-driven factors.  Are you responsive, proactive, does the customer sense you are working for their best interest? Do they sense a high level of trust and commitment towards you? In the end, this is how you show up to them.

Each person will give more or less importance to different factors.  Understanding what is important qualitatively by each stakeholder at your customers and then working to satisfy those can go a long way to winning business.  Finally, the most beneficial aspect of qualitative factors is that they are emotional and can be very powerful.  Sometimes they are so powerful that if you are behind in the quantitative area, you can still win the business based on your qualitative characteristics.

In the conclusion of this two-part series, we’ll look at competitive advantage verses parity and how to improve your qualitative performance.


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