If you have a dealer, contractor or distributor who is loyal and you want them to stay loyal, or if you have a customer you wish was more loyal, here’s an effective way to increase their loyalty. Develop a business plan for them.
Most businesses develop a business plan when they start their business. Many existing businesses develop a plan to show a banker or investor. Almost as soon as the plan is completed, it gets filed away and forgotten as the owner gets back to the day-to-day demands of the business. The net effect is that the owner lets the market determine his future.
Customer business plan development works best if you are a supplier for a major part of your customer’s business, such as supplying shingles to a roofing contractor. It can also be very effective when you supply a product that represents a smaller piece of his business. It can even work with a builder or big box buyer, although it requires a little different approach.
Here’s how to create a business plan for your building material customer.
1. Determine if they are interested. Let them know you’d like to spend some time with them to see how you can help them be more successful. You’d like to develop a plan with measurable goals that involves both of you. If they are interested, move forward. If they aren’t interested, move on to the next customer.
2. Schedule some time to meet. Just start asking questions like:
How is business?
What would you like to accomplish that you haven’t yet?
What are your biggest problems?
Who is your competition?
Why do you think your customers prefer you?
Why do you think your competitor’s customers prefer them?
What changes would you like to make?
This is not a full-blown business plan that will make a Harvard case study. It’s just a simple plan with a few goals and the steps to achieve them. The key is to keep it simple so there are only a few things for you and the owner to focus on.
3. Develop an action plan. Most of this will probably fall on your customer. Look for opportunities for you to be part of the plan. For example, you could commit to training his people or making joint calls or job site visits. You could do a little competitive research for him to find out why people buy from his competitors. Perhaps there is a marketing program that your company offers.
Set dates or milestones to achieve these goals.
4. The most important step to all of this is to follow up. Most business plans fail because the owner gets distracted and before long he has forgotten the plan. When you check back in, you are holding each other accountable. That simple act of accountability will do more to help your customer than just about anything else you can do.
Your customers’ biggest problem is that most of them aren’t accountable to anyone, so they can do what they want when they want. Without making it official, you become the board of advisors that most of them don’t have.
There are lots of customers who won’t be interested. Some won’t want to open up and be honest about their situation. And, frustratingly, most of them won’t follow through and stay committed to even the simplest plan.
Even with all these problems, you can’t lose. The majority of your customers will appreciate your interest in them. You will be making them feel important and valued where most suppliers don’t.
The ones who work with you on a plan will probably do some part of the plan. A few will get really serious about it. Both of these types of customers will be more loyal to you. The biggest benefit is that you will have helped them to be more successful, which means they will be selling or using more of your products.
Builders and big boxes require a different approach.
With builders and big boxes the plan is more about you. Rather than waiting for them to review you, proactively go to them. Ask how you are doing and what you could do better. Develop a plan to make these improvements.
The ‘I don’t have time’ excuse
As each sales person has to cover more and more territory, it’s difficult to see where he or she would have time for customer business planning. Another challenge is that it’s probably not part of their job description or performance review. It’s easy to measure sales and hard to measure customer loyalty, so most companies take the easy way out and just measure sales.
I don’t care how many customers you have, there have to be a few who are the best or that you would like to convert. I’m sure you can find the time to develop plans for these key customers. If you do, you will see the sales follow shortly.