Characteristics of Relationship-Driven Clients

Here's a checklist for evaluating and prioritizing relationship-driven clients. A smart rating system applies to every company database, revealing only the marketing campaigns that matter. It's tempting to jump to conclusions in building your Client Personality Profile. Keep in mind a few "myth busters" on Loyalty Marketing:

YOUR BEST CLIENTS...

Your best clients are not always your biggest spenders
Clients are most valuable not because they are your cash cows (though a profitable side of beef is always nice) rather because they're with you for the long haul, they help you in tooling your best message, and most importantly, they help corral new business to increase profits.

Your best clients might never have purchased anything from you.
That's right. Some of your biggest customer assets might just be prospects. Remember, the value of a client is calculated not only on the revenue they create, but also on revenues from referrals. It's an exponentially powerful formula.

Your best clients don't like to be "sold to."
You never earn the "right to sell" to a customer. When they sense you're selling to them, they'll feel like a project or statistic (even the most loyal of them). If you want a loyal client, throw the traditional sales tactics out the window and stay genuine.

Your best clients aren't always the first to respond to offers.
Don't tag your best customers based upon quickest response times. This approach is fundamentally flawed because it mocks the intelligence of a healthy client who makes informed, methodical decisions. Consider yourself as a client—are you the quickest to make a decision or a purchase?

Your best clients aren't easy to locate in your Web stats.
Test it yourself. Are your best customers showing up at the top of your Web stats? Is Web page "duration" an indicator of piqued interest? Or just as easily an indication of "being lost on the page" or "breaking to nuke a frozen burrito?" Stats have their place in any sound marketing campaign, but they're not the strongest indicator.

Your best clients aren't compelled by pricepoints.
This should come as a relief, since nobody wins at the commoditization game (somebody's always cheaper). In addition, bottomless pricepoints attract flighty commodity-driven customers. Value-driven customers are accustomed to paying what something is worth—your job is to show them the value of that something.

Your best clients can't be found in a predictible demographic.
This fact sometimes creates resistence, because "demographic profiling" is easy to measure. Keep it in the cards, but use it in a supporting role to much more potent "behavior profiling" strategies.

Your best clients differ from each other in their sales cycles.
It should come as no surprise that your customers (even your best customers) are all at a different point in their purchase decisions. Additionally, sales cycles differ greatly in length. All of this amounts to an exercise in "good listening." Don't pitch the "closer" to your elite list all at once, instead offer multiple offers for multiple points of engagement. To restate, "loyal customer" doesn't mean "please take my money."

Your best clients must feel like they're genuinely understood.
The value of a good client list boils down to the "truth" you can get from them in a mutual-respect environment. Companies are constantly adapting to changes, trends, supply, demand, economic factors, and more. As soon as you've lost a good client's respect, you've lost a resource for roadmapping profitable campaigns.

Your best clients want shortcuts, not "logins."
If you're looking for a customer who will "jump through hoops" then you'll likely be short-changed. In exchange for their loyal business, your best clients want no-strings-attached value in return. We're not talking about dumbing down customer privacy, rather avoiding the points of friction that will frustrate your clients or make them feel monitored. Web cookies can be a great upsell/resell tool, but be sure they're functioning as they should.

Your best clients want benefits, not features (nobody wants features).
Self-explanatory

Your best clients will always champion good referral programs.
We often think that people who like our products know intuitively how to point others through the right doors at the right time. Just as we train our sales staff on best elevator pitches, customers and prospects need similar tools. Make it easy for best clients to "sneeze" your products. Better yet, offer them a concrete incentive for doing so. Not even the best clients will do something for nothing. Give them something of value for being contagious.

Your best clients should help engineer your product offerings.
If you're strategizing about your next best marketing campaign in staff meeting, you're going about it all wrong. The whole basis for refining your customer base is to glean a qualified mouthpiece for your product offering. If your best customers aren't sharing their ideas with you, maybe you haven't invited them to a staff meeting lately.

Your best clients are innately loyal, and are not "turned into" loyal.
I like to save the best for last. I've seen a lot of dollars in research, technology, and "marketing speak" revolve around the idea of "converting" customers into loyal customers. This mentality defeats the whole process of growing the right customer segment, and letting the rest drop off the radar. The danger with the "no client left behind" approach is there's no clear-cut process for filtering your database, since all would wear the same number of stars on their foreheads. Innate loyalty in customers comes through only when company teams do their jobs right.

Every customer gets respected, but it's vital to focus on the right customers—your "evangelists." When you craft a message that speaks to your hand-picked crowd, that message will sift out your profitable clients from your loss leaders. Although I might concur that anybody can become a "loyal customer" if you wrok hard enough on them, but consider the costs: You'd be expending enormous resources and neglecting the clients who need you most—whom YOU need most.

Just a note, American Express took this idea to the extreme when they actually "paid" their riskier customer base to leave. How did that turn out? Google "AmEx pays customers to close accounts" to see some of the negative publicity. Source: Wall Street Journal

GETTING STARTED
To better illustrate the attitudes and activities of relationship-driven clients, I've posted a 5-minute demo.

Profiling and Promoting Your Best Clients

Who are your best customers? Profiling and promoting your most valuable customers is more important today than ever before...more important than a great product, a wizbang Web site, experienced management, or a solid brand. The fate of large and small companies today is determined by customer experiences, opinions, attitudes, relationships, and behaviors. Daunting as gathering this info may sound, you can earn top-of-mind awareness by defining great customers and delivering experiences instead of products. In fact, your most valuable customers will expect it.

YOUR DATABASE'S SWEET SPOT
Let's get started. Consider your current customer database. Based on customer value, it likely looks something like this. Clearly the majority of company growth comes from the top 20% of your database. To grow business, the old model says to throw more prospects into the sales funnel. Notice how ALL customer segments expand. Now notice how your infrastructure-sales, customer service and support-must match this growth, making your business top-heavy. If you're focused on business efficiency, you can really only afford to grow relationship-driven clients.

So, how can you grow the sweet spot? You can't simply neglect the loss-leaders because when they leave they'll take a chunk of your business with them...resulting in "loss-leader increase." In February 2009, American Express actually "paid" their "less valuable" customers to leave. Did that work? Google the keywords "amex pays customers to close accounts" to check out the negative press.

THE UPSIDE-DOWN SALES FUNNEL
When you direct all of your communication toward high-value clients, you optimize the source of your database-the sales funnel-by flipping it upside down. Marketing to high-value clients fills the funnel with like-minded prospects and customers because your funnel gets filled by the help of your most powerful sales force, your "customer advocates." Seth Godin, a prominent customer change agent, talks about flipping the sales funnel on its side as a metaphor for a megaphone...thereby empowering customers to endorse you and your product. It all boils down to a process of asking, listening, and then acting, creating a self-perpetuating feedback loop where customer behavior is analyzed and taken into account when designing the next communication.

CREATING A BENCHMARK
Let's get to the root of more revenue: Profiling the best clients in your business, then promoting them to status of "spokesperson." Your most valuable client is based not only on revenues they bring in, but more importantly, on revenues from referrals. For this reason, be sure you're also tracking referrals from PROSPECTS. Referral stats tell you who recognizes your product value and who's good at influencing others. Try this: Sort your database to look at contacts with the most referrals, then the dollar value of revenues from each of those accounts. You've just defined the Lifetime Value per Customer, or LVC.

Now, let's create a "Benchmark" or a persona with whom you'll qualify all outbound sales and marketing efforts. First, list the most meaningful attributes of your top 3 LVCs, including attitudes, behaviors, sales cycles, demographics, and purchases. It isn't important how similar each is to the other, rather how different each is from a commodity-driven customer. We call this the Boxxer Model, a tool for getting you well on your way to building valuable client relationships. Your Boxxer Benchmark will represent a raw lead, a prospect, an acquisition, or a loyal customer, depending on your campaign. Denise Hopkins, VP of Product Development at Experian, talks about "look-alike modeling" as a strategy for prospect messaging that produces 2 to 3 times the typical response rates. Now, evaluate every sales and marketing campaign using the parameters of your Benchmark.

PROMOTING YOUR RELATIONSHIPS
To make each campaign timely and appropriate, consider the stages of your typical sales cycle-ABCDE. For example, when building an Awareness campaign, how meaningful are the offers in your collateral for your Benchmark? Are you building an appropriate relationship within your finding pool? Remember, you can't marry them until you've courted them, and you can't court them unless they trust you. Tagging the ABCDE stages in your database will make your messaging more appropriate and genuine. Let's see how we might promote the following Benchmark through each phase of the sales cycle:

Here's an example of 2 Benchmarks based on database results sorted by combined revenue from self and referrals:

• Brianna:
• Ethnic-urban mix
• Moderate income status
• Benefits over features
• Micro-business owner (Researcher, email receptive)
• Early adopter (Convenience, image-oriented, risk-taker)
• Trend-setter (Latest & greatest, celebrity testimonials, name-dropper)
• Settles for knock-off of original

• Davis:
• Suburbian
• Higher-income status (tightened purse strings)
• Benefits over features
• Quick financial decisions (loyal to firms with timely products)
• Status symbol (Wants genuine only, not motivated by testimonials)
• Non-patronization (averse to "promo hype" and stock photos)

We'll follow our Benchmark, Brianna, along the sales cycle:

In an Awareness campaign, invite Brianna to an online community through cross-linking or search marketing campaigns. Keep the subject matter light, timely, and fun. Encourage collaboration, and always provide an equal-value exchange for any registration.

In a Buy-in campaign, give away an e-book when Brianna subscribes to free outbound communication (newsletter). Once you're earned the right to talk to her, keep it genuine.

In a Commitment campaign, promote a lower price point product or service to get Brianna started. Can she customize it? Immediately encourage her feedback, good or bad, then internalize and act on that feedback. Avoid any implied "handoff" from sales to customer service.

Try this for a Dedication campaign: "Dear Brianna, as one of our most valued clients, you have been inducted into our Customer Advisory Board." Send an invitation and SHORT online survey.

In an Engagement campaign, find a "cause" or something that Brianna is passionate about. Facilitate an event that furthers her cause. Anything from coordinating an open house to positioning Brianna as a "guru" for her cause. The idea is to allow her to freely communicate within her exclusive social circle. If kept genuine, the return on investment will be far-reaching and long lasting.

GETTING STARTED
To flip your own sales funnel, start by taking a close look at your database. Profiling your highest-value clients will do away with vague marketing speak and drive memorable product messaging and collateral. Long-term client relationships will attract healthy business and bring speedy and measurable returns. To better illustrate flipped-funnel effects, view this self-running demo for promoting your high-value clients through the sales cycle.