Protect and Survive

David Tang global VP for VoSKY, believes VARs can reassess relationships with each of their major accounts and determine how likely they are to consider changing suppliers in the near future.

Here’s what Tang says about how to hang onto your existing customers and business in tough times and how to develop strategies to shore up your defences and reduce the risk of losing customers to predatory competitors.

“Now more than ever, generating new business is looking like the difficult option. Budgets are tight, and it can feel like chasing ghosts. So it makes sense to keep existing customers close, and to expand the business that you’re already doing.

But doing this means understanding and protecting your relationship with your best customers, regardless of how long you’ve done business together. So what can you do to protect your core customer base from cost-cutters, and continue to expand your business, even in these hard times?

The first step is to reassess your relationship with each of your major accounts and determine how likely they are to consider changing suppliers in the near future. The second is to develop strategies to shore up your defences and reduce the risk of losing customers to predatory competitors.

What are they buying, and why?
To better understand your relationship with your key customers, try answering an honest ‘true or false’ to the following questions:

1. Our products/services are critical to how the customer does business

2. Our products/services are interconnected with the customer’s business processes

3. The customer has invested in key assets (equipment/products) from us

4. Price has not historically been a primary concern in our relationship.

5. The customer sees great value in what we provide, such as consulting, sharing information about our technology direction, access to special services.

If you have important customers for whom the answers were mostly ‘false’, then the business is potentially at immediate risk. Those customers can duplicate what you offer elsewhere — such as price, delivery, and product specifications – and will find it easy to change suppliers because their switching costs are low.

Protecting your customer base

Regardless of where you feel your current customers are, you can protect against erosion of your existing relationships, and even expand your share of business. The key is to focus on increasing the cost of switching for customers, and reduce the probability of engaging in unprofitable price wars just to keep current business. So:

Look at how customers use your offering. If customers view your offering as a commodity, consider how they buy it. If there is no differentiator, you need to add on quickly.

Make sure you are performing at the highest level to meet customer requirements. Consider not only whether your customers have invested in equipment, procedures, etc., but also what other sources of value you are providing. If they care about cost reduction and quality, is your company aligned with how they need and want to acquire technology?

Make sure the customer is aware of your value. Arrange a meeting with customer executives to provide an update on what you are doing to help them meet their business requirements.

Look for new ways to address the customer’s current business issues and concerns. Ask how you can provide additional value and benefits that will help the customer’s business succeed. Can you serve as genuine business partners in solving problems and advancing the customer’s goals?

An example of a compelling solution that delivers real benefits, a fast ROI and a healthy margin for you is connecting businesses to Skype for voice communications. Using Skype-to-PBX gateways, you can connect any customer to the World’s largest VoIP network, with no need for changes to existing PBX equipment, phones, or PCs – and at a modest one-time cost.

This gives businesses a fast-track to VoIP benefits. Companies with multiple locations — retail outlets, for instance — can set up Voice VPNs, not only saving on outgoing calls to customers and vendors, but also on internal calls, which are completely free-of-charge. The same holds for remote workers, who can use Skype to access office phone facilities at a fraction of the cost of alternative comms methods. Businesses can also add click-to-call buttons on their websites, to help turn browsers into buyers. As well as offering valued customers a new proposition, there’s also the opportunity for ongoing system management revenues.

Most sales people spend far more time on researching and preparing for calls with new customers than they do on preparing for calls with existing customers.

You may know your customers, and feel you’ve already won their loyalty. But rapidly changing conditions are affecting your existing base just as strongly as they are affecting prospective customers. Maintaining a keen awareness of your current customers’ issues and concerns and taking steps to protect and strengthen your relationships can help your business survive.