There are countless ways that you can classify your clients and prospects. While you should never pretend that any client is yours forever, lest you become complacent, there is a loyalty continuum that helps you determine what actions you need to take to create value for—and retain—your clients.
Loyal and Secure
You can classify your client as loyal and secure if you can objectively prove that this client uses no other services in your space. If asked, these clients wouldn’t even entertain the possibility of using one of your competitors. Many of us in business-to-business sales have these anchor clients who, at least for the period we are reviewing, are loyal and secure.
It’s not that there is no conceivable event that could cause the client to be lost. There are countless events that could cause this to be so, including mergers, acquisitions, severe economic downturns, etc. But for purposes of managing clients, the clients in this category should be managed as if they are loyal and secure.
You create value for these clients by continually executing, by moving to strategic, and by continually bringing them new ideas. You cannot rest on your laurels if you hope to keep these clients in this category, and you cannot afford to be complacent.
The following questions are used to verify that a client belongs in the “loyal and secure” category:
1. Do I have all of this client’s decision-makers, decision-influencers, and end-user’s commitment to our relationship?
2. Are their dissenters or opponents within this organization that at some time in the future could damage the commitment from this client? Are there some who are presently dissatisfied?
3. What do the client satisfaction surveys (formal and informal) indicate?
4. Do I have client satisfaction surveys from all decision-makers, decision-influencers, and all other affected parties?
5. Are the contacts within this client promoters of my product or service?
6. Are there members of my own organization that at some time in the future could damage or destroy our commitment from this client?
7. Does this client ever meet with, take calls from, have lunch with, or entertain offers from my competitors?
8. Is any portion of this client’s business given to one of my competitors?
9. Do I have a contractual commitment from this client that obligates them to use my products or services for some period?
If the answer to any of these questions gives you pause, then it is likely that the client doesn’t belong in this segment. Your value creation might need to be different if the client belongs in another category.
Loyal and Not Secure
Some clients will have demonstrated loyalty over prior periods, but may be experiencing any number of changes that require them to be classified as “not secure.” The client may be experiencing changes in their business.
There may be changes in their personnel (particularly your contacts and sponsors), they be merging with another company or being acquired by one, they could make changes to their product or service that change their need for you product or service, or they may just no longer have a need for your service or product.
Or, there may be issues that are not as predictable but every bit as dangerous. Dissatisfied decision-makers or decision-influencers may be a future threat to your commitment. Even more damaging are true dissenters that have a strong negative opinion about your company, your services, or your product offerings. A vigilant salesperson will most likely be aware of these issues.
These clients are loyal because you have deep enough relationships to be able to predict that you will retain the account. But as long as there is dissatisfaction at some level, they cannot be considered secure.
You create value for clients in this segment by executing, by resolving outstanding issues, and by working to improve the experience of those that may not be satisfied with you or your service.
The following questions can be used to assess whether a client belongs in this category:
1. Do we have a history of unresolved problems, issues, or complaints that have been left unaddressed?
2. Is there a seriously dissatisfied or dissenting decision-maker or decision-influence within my client’s company?
3. Does this decision-maker, decision-influencer or dissenter have a known preference for another firm?
4. Does this decision-maker, decision-influencer or dissenter have a prior relationship with another firm? Do they have a strong preference for someone else in my space?
5. Are there any known factors (like annual RFP or RFI) that would indicate an overall continuing commitment to shop the market regardless of your present relationship?
Anyone in business-to-business sales for a significant period of time understands inherently that some clients, as a much as we would like to believe otherwise, fall outside of the above two categories. An honest assessment will require that some clients fall into the following two categories.
At Risk
Clients that are very likely to entertain offers from your competitors, that regularly meet with your competitors, that have a price orientation, or that may have serious service or product issues with your firm should be classified as “at risk.”
In some cases, it would be easy to classify these clients as loyal and not secure. You may simply think of this as a client who may just as easily be lost as will be retained.
You create value for these clients by making major adjustments to what you do. This means you most likely to develop far deeper—and far more strategic—relationships. It probably requires that you correct the issues that prevent your client from capturing the value you create (likely execution issues).
Most sales organizations don’t have any trouble figuring out who goes in the at-risk column.
1. Are the factors that put this client at risk within my company’s control?
2. What changes and what effort would be required to move this client out of this category?
3. Is the effort to move the client out of this category feasible? Reasonable? At what cost?
4. Would the retention of this client take away from our effort to serve and obtain other clients?
5. Does my company have a strategic interest in keeping this client?
6. Is this client a low revenue or low margin client?
Inevitable Loss
These clients have notified you that you that they are leaving, or they have given you some indication that their loss is inevitable. There are many reasons we lose clients, some of which are unavoidable, including price, changes in their business, their loss of clients, and personnel changes, among others.
You have to decide whether it is worth the effort to pursue lost clients or move on to greener pastures.
The following questions will help you decide whether or not a client belongs in the category.
1. Has this client notified you that they will no longer be using your products or service?
2. Are their known changes at this client that indicate its loss in inevitable?
3. Does this client have needs that you can no longer serve (or that might be too expensive to provide)?
4. Are there changes in your business that will cause you to be unable to serve or provide this client?
5. Is it worth the effort to try to retain this client?
6. Do I have some way to create more value for this client than I have been able to in the past?
7. Are they willing to pay for that value creation?
8. What would it take to regain an opportunity to serve this client?
In order to use the above analysis, take a printed list of your clients and assess each for the above listed criteria. Place each client in the appropriate category. If you make an honest assessment, you will end up with clients in each category. If you do not have clients in each category, ask yourself if you are being realistic and honest about these clients. There is nothing to be gained by avoiding a truthful assessment of your present client category classifications, and there is everything to be gained by managing these clients accordingly.
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