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Develop  a  Service  Strategy     How  do  you  service  existing  customers?    And  how  should  you  structure  your  customer  service  or  account   management  function?    Do  you  need  highly  skilled  account  managers  to  work  with  customers  on  a  day-­‐to-­‐ day  basis,  or  can  you  handle  most  of  it  via  your  website?         Use  this  exercise  to  evaluate  the  needs  of  your  customers  and  build  a  strategy  that  works.         For  each  customer  segment,  think  about  how  your  average  customer  buys  as  well  as  the  value  you  provide   versus  your  competitors.       Customer  segment  

CRITERIA  TO  CONSIDER  

YOUR RESPONSE  

Operational  excellence  /  cost  leadership    Product  leadership  /  innovation    Customer  intimacy  /  solutions  

What is  your  primary  value  proposition  for   this  segment?     How  frequently  do  customers  in  this  segment   purchase  from  you?    

Frequent  /  ongoing    Infrequent  /  sporadic  

How do  you  handle  a  customer’s  order  –  via   personal  contact  or  an  impersonal  system  (i.e.   your  website)?    

Personal    Impersonal  

What is  the  average  lifetime  value  of   customers  in  this  segment  (relative  to  other  

High  –  customers  in  this  segment  deliver  the  most   profit  to  the  company    

segments)?  

 

Moderate  value  compared  to  other  customer  segments    Low  value  

Very  important  

How important  is  this  segment  to  your   company?      

Moderately  important        Low  importance    

Customer profile:    Review  your  responses  to   the  answers  above,  then  choose  the  profile   that  best  matches  your  answers.  

Purchasers  focused  on  cost,  easily  lured  away  by  a   better  offer    Frequent  purchasers  with  impersonal  contact    Frequent  purchasers  who  buy  via  personal  contact    High  value  customers  with  high  importance,  lots  of   personal  contact  

Customer Retention  „  Develop  a  Service  Strategy  

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CRITERIA TO  CONSIDER  

YOUR RESPONSE  

  Repeat  the  analysis  for  each  customer  segment.         Next,  use  the  table  below  to  match  your  customer  profile  with  management  &  retention  tips  that  are   appropriate  for  that  profile.    Once  you’ve  identified  the  important  elements  in  your  strategy,  you  can  use   customer  retention  and  other  Marketing  M.O.  exercises  to  create  campaigns  for  those  profiles.       Customer  segment  

CUSTOMER  PROFILE  

Purchasers   focused  on  cost,   easily  lured  away  by   a  better  offer  

IMPORTANT ELEMENTS  OF  YOUR  MANAGEMENT  &  RETENTION   STRATEGY   „ Monitor  your  competition  to  make  sure  you’re  delivering  the   best  price.    [Pricing  can  help]     „ Have  your  account  reps  share  customer  comments   concerning  pricing.    If  a  customer  is  complaining  about  your   price,  they’re  probably  shopping  your  competitor.     „ Calculate  the  average  lifetime  value  and  purchase  frequency   for  customers  in  this  group,  then  run  a  regular  analysis  to  see   which  customers  have  fallen  behind  the  averages.    Those   customers  are  at  greater  risk  of  defecting;  you  can  create  a   special  offer  that  your  account  reps  can  present  personally,  or   you  can  launch  regular  campaigns  to  those  accounts  that  are   at  risk.      [Customer  Lifetime  Value  can  help  you  estimate   lifetime  value;  394  can  help  you  calculate  purchase  frequency]     „ Use  marketing  campaigns  to  continually  reinforce  the  value   you  provide  and  try  to  differentiate  your  product  in  the  mind   of  your  customers.   „ Lock  customers  into  long-­‐term  contracts  to  deliver  a  lower   price  and  keep  their  loyalty.     „ Supplement  your  personal  relationship  with  ongoing   campaigns  to  counteract  those  that  your  competitors  are   delivering.     „ Use  volume  discounts  and  incentives  to  keep  customers   shopping  with  you.    

CONSIDER?  Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Customer Retention  „  Develop  a  Service  Strategy  

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CUSTOMER PROFILE  

Frequent   purchasers  with   impersonal  contact  

Frequent   purchasers  who  buy   via  personal  contact    

IMPORTANT ELEMENTS  OF  YOUR  MANAGEMENT  &  RETENTION   STRATEGY   „ Educate  your  team  about  signs  that  a  customer  is  shopping   your  competitors  and  make  sure  action  is  taken  to  keep  that   customer.     „ Use  purchase  analysis  to  identify  those  customers  whose   volume  or  frequency  is  dropping  and  launch  campaigns   designed  to  raise  their  volume.    [394  can  help  you  calculate   purchase  frequency]     „ Develop  ways  to  efficiently  monitor  your  competition   without  a  lot  of  time  or  resources.     „ Make  sure  your  website  is  easy  to  navigate  with  very  easy   reordering  features.     „ Make  sure  you  process  and  fulfill  orders  in  the  time   promised.     „ Use  purchase  analysis  to  identify  those  customers  whose   volume  or  frequency  is  dropping  and  launch  campaigns   designed  to  raise  their  volume.    [394  can  help  you  calculate   purchase  frequency]     „ Build  strong  upselling  and  cross-­‐selling  capabilities  into  your   website  and  phone  ordering  systems.     „ Set  up  automatic  reorder  programs  to  eliminate  the  need  to   manually  repurchase.     „ Create  a  commission  structure  for  upselling  and  cross-­‐selling   as  incentive  for  your  account  team.         „ Offer  similar  incentives  to  your  customer  service  team  to   encourage  customer  retention.     „ Use  purchase  analysis  to  identify  those  customers  whose   volume  or  frequency  is  dropping  and  launch  campaigns   designed  to  raise  their  volume.    [394  can  help  you  calculate   purchase  frequency]   „ Make  the  re-­‐order  process  easy  for  your  customers.    

CONSIDER?  Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Y    

N    

Customer Retention  „  Develop  a  Service  Strategy  

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CUSTOMER PROFILE  

High  value  

IMPORTANT ELEMENTS  OF  YOUR  MANAGEMENT  &  RETENTION   STRATEGY   „ Build  a  strong  account  management  team  with  an  emphasis   on  personalized  service.    These  customers  want  to  call  the   same  person  and  know  they’re  taken  care  of.        

CONSIDER?  Y    

N    

customers with  high   importance,  lots  of   personal  contact       Look  back  at  the  items  you  checked  –  they’re  the  elements  you  should  include  in  your  service  strategy.    Think   about  your  overarching  service  plan  and  explain  what  you’d  like  to  do  below:                                   Next  steps:     NEXT  STEPS  

PERSON  

DUE DATE  

     

   

   

DELIVERING PERSONALIZED  SERVICE     If  you’ve  identified  the  need  to  offer  personalized  service,  you  have  three  options:     OPTION  

TYPICAL SCENARIO  

CONSIDER?

Customer Retention  „  Develop  a  Service  Strategy  

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OPTION

TYPICAL SCENARIO  

CONSIDER?

„ When you  have  a  small  number  of  high  value,  important    Y      N   customers  who  purchase  more  than  once.     „ When  you  need  to  keep  selling  into  an  account  once  the   first  purchase  has  been  made.     Accounts  are   „ When  you  have  a  large  number  of  customers  with    Y      N   transitioned  from  sales   moderate  to  high  value  and  regular  purchasing.   reps  to  account     managers  when  they   „ When  it  isn’t  critical  that  the  original  salesperson  is  the   become  customers   primary  contact.     Customer  service  is   „ When  you  have  low-­‐value  customers  who  are  buying    Y      N   handled  through  a   primarily  on  price  and  not  on  intimacy.   general  customer     service  group   „ When  customers  are  primarily  using  your  website  or  other   automated  systems  to  repurchase,  gather  information,  etc.     „ When  there  is  minimal  personal  selling.         If  you’re  not  sure  whether  to  have  your  sales  team  or  account  managers  manage  existing  customers,  here  are   some  of  the  benefits  and  challenges  of  the  “account  manager”  option.    Check  those  that  you  think  apply  to   you:     Sales  reps  manage   their  own  accounts  

BENEFITS

An  account  manager  earns  less  than  a  top   sales  performer,  so  you  can  manage  existing   customers  more  profitably.     In  many  industries,  account  management  is  a   more  routine  function  than  sales  and  is   better  suited  to  a  different  personality  profile   than  a  sales  position.    By  splitting  the   functions,  you  can  ensure  that  the  right   person  is  managing  the  account.          

CHALLENGES

An  account  manager  typically  has  less  sales   experience  and  usually  isn’t  as  successful  as  a   salesman  at  growing  accounts.       If  the  salesperson  stays  on  the  account  team,   the  customer  can  get  confused  about  who  to   contact.    

If  something  goes  wrong  with  the  account,  the   account  manager  may  not  have  the  business  or   industry  experience  to  address  and  resolve  it  as   quickly  as  a  salesperson  might.  

Notes:    

Customer Retention  „  Develop  a  Service  Strategy  

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You may  be  better  off  giving  your  sales  reps  the  additional  time  to  sell  rather  than  forcing  them  to  manage   existing  accounts.    Use  396-­‐A  to  help  you  estimate  how  much  time  it  takes  to  manage  existing  accounts  and   how  much  new  revenue  you  can  gain  from  focusing  your  sales  team  on  new  business  only.     If  you  decide  to  use  an  account  management  team  and  need  help  setting  it  up,  exercise  391  can  help.      

Customer Retention  „  Develop  a  Service  Strategy  

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Develop a service strategy  

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