CEOs have either a sales, marketing or technical background. And I don’t knock that. They’ve done wonders with the brands and expanded the customer base hugely. But what they haven’t been able to do is plug the leak. The speed with which the customer is acquired, is almost the same as the pace at which they are lost. It eventually is a race to see what comes out on top; acquisition or churn.
Selling is Passé
Not too long ago business models with the maximum sales thrust led the pack. Today, it’s a different ball game and no longer necessary for companies to deploy formidable sales strategies to gain marketshare. The evolution in technology and communication, coupled with unlimited and freely available information, has empowered the customer to make their own decisions. Selling is almost redundant; the customer comes to buy. And it is becoming increasingly challenging and critical to retain that customer.
Retention is the new Sales
Emmet C. Murphy and Mark A. Murphy’s book, “Leading on the Edge of Chaos”, observes “a 2% increase in customer retention has the same effect as decreasing costs by 10%. Depending on the industry, reducing your customer defection rate by 5% can increase your profitability by 25 to 125%”.
The focus of business needs to shift from acquiring a new customer to retaining the existing customer. The shift has to be from sales to service. Customer profitability tends to increase over the life of a retained customer. Advocacy of the satisfied customer will create awareness amongst the potential customer to drive new sales.
By 2020 it is estimated there will be more than 50 billion connected devices with internet being the primary use. The voice of the customer is going to be the strongest marketing tool, surpassing any other strategy to communicate brand and commodity superiority. The only way to get the customer to advocate the brand is by delivering exemplary service and creating a fantastic experience.
Leading the Change
It is time for the baton to change hands, to bring focus from sales to service. And it needs a customer centric leader. Someone single-mindedly dedicated to raising the bar of customer experience. Someone with expertise and experience in servicing and retaining the customer.
Don’t drop this baton.
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