Customer Acquisition and Retention: A Comprehensive Guide for Sales Professionals

Posted on May 19, 2024 in Economy

Customer Strategy

A customer strategy is a business plan designed to attract, retain, and satisfy customers. It involves understanding customer needs, creating value, and maximizing long-term relationships. The goal is to understand the customer’s perceptions and maximize customer satisfaction and responsiveness.

Customer Buyers

B2C Buyers

B2C buyers are individuals or households who make purchases for personal use. Their decisions are often driven by emotions and individual needs. They may make habitual buying decisions, variety-seeking decisions, or complex buying decisions.

B2B Buyers

B2B buyers are organizations or businesses that make purchases based on rational factors such as cost and efficiency. Their decisions are made by multiple people and are based on precise technical specifications and product expertise. They may make new-task buys, straight rebuys, or modified rebuys.

Steps in the Buying Process

  1. Needs awareness
  2. Evaluation of solutions
  3. Resolution of problems
  4. Purchase
  5. Implementation

The Buying Process and Buyer Types

Understanding the customer’s buying process can help you tailor your sales approach to different types of buyers. There are three main types of buyers:

  • Transactional Process Buyer: Focuses on the purchase stage.
  • Consultative Process Buyer: Focuses on needs awareness and evaluating solutions.
  • Strategic Alliance Process Buyer: Focuses on carefully studying the proposed partner.

Buyer Resolution Theory: The 5 W’s

A potential customer cannot make a purchase unless they have made five decisions with clear affirmative answers:

  • Why should I buy?
  • What should I buy?
  • Where should I buy it?
  • When should I buy it?
  • What is a fair price?

Maslow’s Hierarchy of Needs

Maslow’s hierarchy of needs is a motivational theory that suggests that people are motivated by five levels of needs:

  1. Physiological
  2. Security
  3. Social
  4. Esteem
  5. Self-actualization

Buying Motives

Every buying decision has a motive behind it, and many are influenced by more than one buying motive. Some common buying motives include:

  • Emotional vs. rational buying
  • Patronage (support for a business by regularly buying products/services) vs. product buying

Creating Value through the Buying Process Model

The buying process model identifies six strategic initiatives that can create value for customers:

  1. Strategic initiatives identified
  2. Need awareness
  3. Evaluation of solutions
  4. Resolution of problems
  5. Purchase
  6. Implementation

Salesperson’s Main Purpose

The main purpose of a salesperson is to facilitate the sale of products/services by identifying potential customers, understanding their needs, presenting solutions, and closing deals.

Prospect

A prospect is a customer who has shown interest in a company’s products/services but has not yet made a purchase. They may be individuals or businesses who meet the qualification criteria established by the company.

Reasons for Customer Attrition

Customer attrition occurs when customers stop doing business with a company. Some common reasons for customer attrition include:

  • One-time need or extended time between purchases
  • Movement outside of territory
  • Customer business failure or merger
  • Loyal buyer or purchasing agent changed positions
  • Sales lost to the competition

The “Ferris Wheel” Model

The “Ferris Wheel” model is a visualization tool that helps businesses understand customer retention. It shows a continuous cycle of attraction, retention, and attrition. Customers may get back to business after leaving, and the model aims to supply an ongoing list of prospects.

Business Development Representative (BDR)

A Business Development Representative (BDR) engages with accounts, targeting key and influential contacts. They are responsible for qualifying opportunities and staging initial sales meetings for the field sales organization.

Account or Business Development (ADR) Position Description

An Account or Business Development (ADR) is responsible for administering the Salesforce database, ensuring accurate data entry, follow-up planning, lead tracking, and pipeline reporting. They coordinate with marketing, support, sales, product, and account management teams to drive prospecting activity and pipeline growth.

Three Things to Improve the Quality of the Prospecting Effort

  1. Increase the number of people/accounts who board the Ferris wheel.
  2. Improve the quality of the prospects who board the Ferris wheel.
  3. Shorten the sales cycle by quickly determining which of the new prospects are qualified prospects—qualified as to need, authority to buy, ability to pay, and authority to purchase the product.

Referrals

A referral is a recommendation made by one person to another regarding a product/service or person. A prospect that has been recommended by a current customer or by someone who is familiar with the product is considered a referral.

Qualifying Prospects and Accounts

Qualifying is the process of identifying prospects who appear to have a need for your product and should be contacted. Every salesperson needs to establish qualifying criteria, which involves finding answers to several basic questions:

  • Product need
  • Holds purchasing authority
  • Possesses the financial capacity
  • Displays the intent to purchase

Sales Intelligence

Sales intelligence is necessary when the sale is complex and requires a long closing cycle. It goes beyond sales data to include insights about a prospect’s marketplace, firm, competitors, and the prospects themselves.

Portfolio Model

 uses account opportunity (forecasted sales) and competitive position (the ability to capitalize on the opportunity) to classify how much sales effort should be made on individual accounts in the prospect database. Prospects listed in the strategic accounts cell (high sales forecast and strong position for closing the sale) will receive the largest amount of sales effort, Drag accounts cell will receive little, if any, attention.

Presentation Strategy= well-conceived plan that includes three prescriptions: Establishing objectives for the sales presentation, Developing the presale presentation plan, Renewing one’s commitment to providing outstanding customer service.

Strategic Planning the Pre approach= Review objectives, Review model, Review presentation plan & Prepare approach worksheet. 

Actions during approach= telephone contact, social contact (build rapport), business contact (agenda, question, survey). 

Establishing Presentation Objectives= During the first sales call on a new prospect: Establish rapport, Obtain permission to ask need identification questions, Obtain information to establish the customer’s file. During stage 2 of the buying process: Involve customer in product demonstration, Provide value justification, Compare and contrast different solutions (if applicable).

Team Presentation Strategies= Team selling has emerged as a major development. Require: A more detailed precall plan, Clear understanding of role, Clear presentation objectives.

Planning the Approach= Review relationship strategy, Review product strategy, Review customer strategy, Review presentation strategy. 


The Six-Step Presentation Plan= 1)APPROACH, Obj= Build rapport, Capture person’s full attention, Transition to the next stage of the sales process. 

Making Sales Appointments by Phone= Plan in advance. Identify yourself/company you represent. State the purpose & exp how benefit. Show respect for prospect’s time. Confirm the appointment w e-mail message/  letter with the date, time, and place of your appointment.

Guidelines for Good Social Contact = 1) Prepare for the social contact (Research topics of interest to prospect, Review prospect database, Read relevant industry reports). 2) Initiate social contact (Ask open-ended questions, Apply nonverbal communication skills such as good eye contact and a smile). 3) Respond to the customer’s conversations (Acknowledge the message verbally and nonverbally, Listen actively and use gestures to indicate ongoing interest). 4) Keep the social contact focused on the customer (Keep the conversations topics relevant to the customer).

Approaches to Gain Prospect Attention= Agenda approach, Product demonstration approach, Referral approach, Customer benefit approach, Question approach, Survey approach, Premium approach. 

Sales call reluctance (unwilling/hesitant to do something) includes the thoughts, feelings, and behavioral patterns that conspire to limit what a salesperson is able to accomplish. Causes: Fear of taking risks, Fear of group presentations, Lack of self-confidence, Fear of rejection. Manage it: Be optimistic about the outcome, Practice approach before making the initial contact, Recognize that it is normal to feel anxious, Develop a deeper commitment to your goals.