How to Change the Average
Throughout the last few weeks, we have discussed how essential retention rate is to your growth. Unfortunately, the hard part is that you cannot change your organization’s “average” retention rate. You cannot change your organization’s “average” buyer tenure. You cannot change your organization’s “average” sales equity. You have no “average” buyers to change, you have an individual buyer— a 1:1, seller-to-buyer relationship. If you want to improve these metrics you have to move an individual buyer from “fine” to “fantastic”!
Imagine plotting each of your individual customers— the people, not the organizations they represent— on a chart, such as the one below:
The X-axis represents the value of that buyer to you (e.g., annual revenue, annual profit, lifetime value).
The Y-axis represents the amount of sales equity you have earned with each buyer, from low to high (e.g., antagonistic, transactional, predisposed, to trusted advisor).
On the chart, each dot represents an individual customer— a person. You could try to calculate your “average” customer value and perception, yet if you are like most businesses, your challenge is that you do not have any average customers. Each dot represents an individual buyer at one of your accounts, and while mathematically the average is correct, it is misleading.
If you had such a chart, you would probably first want to know who is that guy in the bottom right corner— the one with a very high value, yet very low earned sales equity. You want to know his name, right? He should be front-and-center for your retention efforts (AXR)!
At the same time, what about the buyers along the top of the chart? You would want to know the names of the people with whom you have earned significant sales equity; they would be your obvious targets to expand your current position, cross-sell new offers, and use them as a reference.
Ultimately, companies do not do business together— the people within the companies do. Having a “fine” relationship with your buyer is not good enough to drive growth. But, if you know what kind of relationships you have, whether that be transactional clients or trusted advisors, you can determine the limited resources you have to drive maximum profitable growth.
What are some ways you treat your buyers as individuals? Let us know in the comments below! After that, follow us at “Encompass CX” for more posts and updates!
Co-written by Alexis Audeh