Following are some ideas that any business should consider when designing policies and procedures to deal with customers/clients.
- Clients are not transactions!
While transactions are important, when we confuse transactions and customers we lose the leverage of the customer relationship.
- Build relationships INTO your policies & procedures!
When we design an organization, we need to consider how our policies and procedures will ALLOW our employees to build client relationships.
- Transaction density is just as important as transaction intensity!
The more you can "do" for your clients, the greater number of products and services they may purchase from your firm. If you increase the number of options for them each time they use your services, the likelihood remains that they will purchase or use your services in greater depth each time they purchase.
- What is your "share of life?"
Throughout the lifetime of your clients, you will have the opportunity to share your services with them. To the extent this sharing is beneficial to both parties will indicate the level of share you have the opportunity to gain. Over the course of this sharing, your services will gain a percentage of total sales in that category of your customer's purchasing life. This is your "share of life."
- Building relationships and margin through attitude!
Indirect benefits of handling your customers as if their total purchasing lifetime matters is the ATTITUDE of your enterprise. Even if customers never return or purchase another thing, they remember and pass on to others that attitude.
- Margin increases over a lifetime!
Studies have shown that over a lifetime of a client relationship, that profits increase due to lower costs of acquisition and maintenance in the relationship.
- Customer loyalty results from relationships!
Word of mouth advertising constitutes roughly 55% of your total impressions that bring customers to your business. As customer loyalty increases along with lifetime value and share of life, the ability of your firm to attract and maintain its client base increases customer loyalty.
- "Lifetime value systems" increase barriers to switching!
The greater the relationship that exists between your firm and your clients, the more your clients are invested in your business. This investment increases the "switching cost" of your customers to move to another brand or service provider. Due to the simple attitude your firm develops regarding "customer lifetime value," your clients are "encouraged and attracted" to doing even more business with you because it is easier than training a new service provider to serve them as well.
- Lifetime value systems create leverage for employees!
When your employees understand the concept of client lifetime value, they find it much easier to deal with problems associated with client relationships. Instead of dealing with the moment they deal with the moment in the context of the lifetime value relationship!
- Client Lifetime Value means "money for nothing!"
The sheer force of a client relationship produces benefits to the business through increased margin and benefits to the client through innovative ways to meet needs. This perspective is win-win and offers momentum to the relationship that creates opportunity for everyone involved!