A great way to keep customers for life is to make them dependent on you. Collaborating on product development projects, arranging customized training programs for their people or setting up dedicated services can help build strong, long-tem relationships that competitors will find hard to break.
There’s more than a loyalty bonus in collaboration. Getting closer to your customers can reduce your sales and supply chain costs, help you plan future inventory, product developments and give you greater account control.
Get to know your customers’ goals
So where does collaboration begin? Do you know why customers keep coming back to you? It could be quality, price, convenience, delivery or a combination of those factors. Do you understand their challenges, their business plans and their perception of you? If they just view you as a supplier, chances are that key account might soon defect to a better offer from a competitor.
But, if they see you as a trusted business partner, essential to their success, you’re looking at a strong, long-term relationship. Here’s an example.
Collaborating to reduce a customer’s costs
A company supplying fuel charge cards to fleet operators faced tricky annual contract negotiations with a major customer that represented a big slice of its turnover and profit. Negotiations were traditionally based around the charge for managing the card program and that made the company vulnerable to lower cost competitors.
The company recognized through discussions with senior executives that the fleet operator faced increasing administration costs in controlling their fleet expenditure. By integrating their information systems with the customer and developing a customized reporting package, the supplier was able to demonstrate a reduction in the fleet operators’ administration costs.
This initiative moved negotiations away from price to business benefits by enabling the fleet operator to improve efficiency and reduce costs. The company transformed its perception from supplier to strategic business partner – a strong basis for a customer for life.
Becoming a product development partner
Collaborating on product development is another great way to build lifetime relationships. The pressure to get quality products to market continues to intensify and that gives suppliers an opportunity to build strong outsourcing relationships based on collaboration.
A components supplier, for example, can take on the design and development of an engineering component that is critical to the performance of the customer’s product. If the customer does not have the skills or resources to handle that work inhouse, the supplier becomes an essential partner.
As the customer gains confidence in the partner, they can plan future product development projects utilizing the supplier’s skills and expertise to add value to products and reduce development times. It’s a win-win situation for both parties and a good basis for customers for life.
Strategy for success
Collaboration gets you in deep with your customers. It builds relationships based on trust and mutual benefit. And, it puts up big barriers for your competitors to overcome. This is a sure-fire strategy for success in the battle for customers for life. Put your sales and marketing team on the case, find out everything you can about your customers’ goals and challenges and demonstrate how you can become their strategic partner.
