Each according to their importance

The teacher Carlo Torrecilla Divide customers by what they bring. The structure customer or the one with whom 80% of the structure is paid. It is a captive user or buyer but when it does go it is the most damaging and difficult to replace as the rest of the customers in the market are usually dependent on other companies. It leaves little wiggle room as prices are heavily adjusted, but it offers such volume that it helps keep operations going.

For example, for a consulting firm it would be a multinational corporation, for a chair manufacturer it would be an airline, and for a business school it would be the degrees.

The margin customer

It’s the occasional. It usually orders a more or less large volume where you can ask for a lot of margin. They are most interesting in the short term, loyal but never trapped. Remember that every time you get one you have to fight with the rest of the competition. Also that it’s not hard to catch them when you lower the prices.

For a business school, that would be specific training; in the case of a consultancy, the occasional client asking for a business or training plan who may become the structural client; If it is the chair factory, we would talk about the individual customers who want to buy one.

The image client: It is usually a public body or something similar that you are interested in because of the credibility and image that you convey to the rest of your customers. There is very little wiggle room. For a business school or consulting firm, these would be agreements with a local government or with a ministry. In the case of the chair factory, for example, their image customer can be Formula 1.

Finally, based on Torrecilla’s analysis, the client portfolio should allow the structure to pay (30% of structure clients), achieve performance (30% of margin clients) and achieve positioning (30% of image clients).

Signs that indicate something is wrong

According to some experts, the Spanish company’s flaw lies in its concern for short-term results, which entails more commercial pressures, less customer service, less information, fewer relationships, and just worrying about the what without addressing the how. And that obsession leads to a pretty clear disregard for the customer’s best interests. It’s the big unfinished business of businesses, and the most important one that needs to be addressed if we’re to keep our best customers.

All of this work must always be done, but it is especially important when it is determined that something is going wrong. There are a few signs of a customer’s discomfort, the most common being:

The customer knows the offers of your competitioncomments on them, names models, knows prices…

Did you notice a gap? face to face with the customer: before the relationship was more fluid and constant, now it is difficult for him to find a gap in his schedule to serve you.

occurs greater time interval between orders. It can still be the same amount for each order, but the number of orders will be less. Another possible scenario: placing fewer and smaller orders.

Start ask about things that are not common, either in the form of orders or conditions or requirements. It may also happen that you request information from a new provider and not from an old one.

they audit you with low note to load arguments.

Complaints or complaints are increasing. In all these cases it is necessary to act quickly and make short-term catch-ups to convey a privileged situation without telling him that it is only for him, so that the perverse effect of blackmail with the announcement that this is the case is go.

never throw in the towel

Customer recovery plans require what certain specialists call “psychological time.” This is the necessary time to forget the reasons that made them leave you. Maybe you shouldn’t show up for a month, six months, or even a year, but during that time you should keep in touch with him in the following ways:

Invite him to events where you are present (conferences, fairs, conventions), tell him about your achievements but show some disinterest in money, invite him to events where your VIP clients are present as if he were still part of it Circle specials so he can see what’s missing. Strengthen your relationship with him.

The competitor also failsso stay tuned Schedule quarterly visits for reasons other than sales. Search for the relationship, provide useful information (studies, jobs, documents …). Any excuse is good for a regular visit, but never more than three a year.

After a year and a half, he makes another aggressive offer.

Try to stop the leak

Experts recommend finding out why the customer is leaving you:

– You no longer need the service. If so, there is little you can do other than try to maintain good relationships.

– Dissatisfaction with the service. This can be due to three reasons: too high expectations, unwillingness to meet your needs and because the staff who take care of it are not sufficiently prepared. In these cases, suggest improvements in customer service, deliver … in short, solve what has upset you.

– The price factor. If the competition makes you a better offer, try to keep it.

Acting in either of the last two situations (lowering the price or improving the service) is tricky. On the one hand, because your negotiating position is weak and the customer, if he perceives it that way, can ask you to make a fuss about it; on the other hand it is unprofessional. The client feels that if you had taken these measures earlier, they could have improved their condition sooner. Result: The opposite effect can occur, that is, you react even angrier and leave even angrier.

Whatever the case, ask for an interview with your client and ask them to explain the reasons so that they can improve in the future.

Search for cufflinks from this customer

the consultant Juan Carlos Alcaide remembers his own experience in the early days of his business: “We had founded a consulting company and realized without really knowing why that 60% of our invoices came from a bank. When the manager of the company fell out of favor, we lost the client and with him the entire basis of the business. After overcoming the initial fear, we decided we needed to look around the market for Gemini, which in our case wasn’t so much about acquiring another bank as it was about finding companies to build branches are organized around and who rely on human teams and tariffs. in short, organized in a manner similar to a bank. And we find them in travel agencies, insurance agencies, real estate agencies, franchise chains…”.

It’s about looking for companies that can replace the previous one, either because it’s the same sector you already dominate or because it’s a similar structure and you can bring your expertise.

Reconsider cost and structure

There’s no question that when that customer reporting 60% or 80% of your bills disappears, you’ll need to rethink your costs. But this incision can be made more or less rationally and more or less painfully. Outsource all services that are not part of your value creation.

It’s what Carles Torrecilla calls it Tactical Excalibur: You need to reduce the structure, but do it in the departments related to invoices, never in those that may be the tools to attract customers, such as marketing, sales or advertising.

For another expert, it is about the application of the so-called management trumpet: Those who reduce sales must remain flexible in order to reduce structural costs. And this will only be achieved if you can subcontract all services that do not add value depending on the activity of your company, or opt for flexible production. But without touching the strategic processes that have the customer at the end of the road.

Also, before you cut staff, try relaxing your HR department’s terms: talk to the team first. If you are committed, you will understand. Explain the situation to them and negotiate the new terms with them. Perhaps you decide to reduce working hours in parallel with salary cuts, to enter into commercial agreements or to transfer part of the workforce to external collaborators…

In the hypothetical case of a chair manufacturer losing its best customer, one way to cut costs is to close the factory and keep the showroom and design office, giving it image and margin, and leave production to another competitor.

Redefine the strategy

You need to see who can continue to be your consumers. It’s about identifying your added value and finding out where you can best exploit it. As an example, one of the consulted specialists recalls the case of the appearance of Velcro, which caused the collapse of a factory producing staples. They broke in, but the commercial director at the time thought they were actually dealing with small metal parts and looked for other industries. So he discovered that they could become important suppliers to automobile companies and they survived.

Take it as an opportunity to reconsider the deal, but consider what you did wrong. And be patient. Any process of acquiring new customers requires deadlines that are never less than six months, a period that you must weigh up whether or not you can cover.

company management