As a small business owner, you will probably lose some business during the downturn, despite your best efforts, as client companies cut their budgets, shift strategy, or, sometimes, go away altogether.
By Julia Rogers at Open Small Business.
The economic downturn has made client and investor retention trickier than ever. Business owners have to do a lot more to compel investors and clients to make long-term commitments and agree that investing in their services or products are essential. According to SMSmallBiz.com and the Wall Street Journal, a lot of businesses are focusing on new strategies – like diversification and re-envisioning current skills or products – that will help them reach new markets and keep the attention of existing clients.
Bernard Nneji, president of Sigma Works Group, a process-improvement agency, suggests a variety of reasons clients and investors say they have lost interest in a small business: the client contact has changed and decides to “fire” the business; budgets and timelines are no longer working for the client; the small business’ strategies and execution of strategies cease to be in line with the client’s mission or the client has outgrown the small business and needs some bigger, fresher ideas. Ultimately, losing clients or investors most often comes down to a basic relationship-building problem –business owners’ inability to identify their clients’ and investors’ real needs from the beginning and a failure to satisfy them.
Regardless of why small businesses lose clients or why interest wanes among their client or investor base, they must focus on building relationships, and there are ways to maintain solid relationships with your best clients and set the precedent for eliciting long-term commitments from new ones.
The truth is, in any economy, chances are, if a small business finds itself with a lot of clients that don’t want to make long-term commitments or leave after one project, it’s often the small business’ problem … not the clients’! The following tips can help you maintain strong relationships with small business clients and investors as you weather the recession.
Know what the sales cycle is and follow a process for bringing your clients through it. Many business owners fail to recognize that the sales cycle is a tangible, consistent process that must be followed with each and every prospect, customer and client. Basically, the sales cycle is the time it takes for a qualified prospect – someone who genuinely needs your products or services and is willing and able to invest in them – to close. The goal is to shorten the sales cycle for each client and increase their trust in you enough to sign on the dotted line. This will make it more efficient to bring in clients. According to Jeff Thull at Inc.com, a key to shortening the sales cycle is bringing clarity to your clients so they are certain you are the best solution to their problems. Figure out what compels your prospective clients and investors – and what ails them – so you can create a sales pitch and a communication style that will appeal to them and keep them interested.
Make real plans to communicate. Many small business owners lose momentum during a sale because they stop communicating with their prospects and investors … or their prospects and investors stop communicating with them. Regardless of which party drops the ball, once this happens, the sale will not close. As a small business owner, you have to take responsibility for communicating with your prospects and clients at all points of the sales cycle with diligent, relevant, planned follow-up techniques … without being a pest. Communication is at the center of any long-term business relationship. According to Denise O’Berry, a resident small business expert at AllBusiness.com, strong relationships – both those within your own company and those with others that are potential and existing clients and investors – will be the best foundation for your business.
Make sure relationships are always mutually beneficial. Facing difficult, desperate economic times and rushing towards a quick sale, many business owners fail to highlight the term “mutually beneficial” as they are proposing agreements and contracts to current and new clients and investors and building relationships. Relationships with clients especially need to take you beyond short-term solutions and center on long-term plans that help these clients better understand where their businesses are going and also help you plan your own future. Take the opportunity to show your clients that you care about their needs as much as you care about your own. Illustrate how signing a long-term agreement with you can bring clients and investors specific benefits, address the long-term challenges they face and add real value. All relationships you build should be built around benefits that keep you and your clients and investors happy and prosperous.
In order to survive through the recession, business owners have to take control of their own businesses and stick to a very solid plan. They need to focus on building solid relationships and staying strong with existing customers and clients.