So far, when most suppliers are faced with the dilemma of losing customers to competitors, their quick response is to chase new customers to make up for the loss of lost customers, rather than calm down and think: Why? How to retain these customers? So the relationship between most suppliers and customers is like looking for a needle in a haystack, then throwing it back and looking for it. As the company's most precious wealth-customers, like sand in an hourglass, it is lost a little. The key to this embarrassing situation is that suppliers have not weighed the relationship between new and old customers and have not really realized the important value of retaining existing customers.
Why is the value of existing customers extraordinary?
The first and most important point is that the marketing time invested in existing customers is most likely to generate new business. Existing customers represent a high level of profitability. The reason is that when developing business with these existing customers, the company doesn't have to invest a lot of time in customer research and industry research, because these tasks have already been carried out when trying to win over existing customers. As the main part of developing new sales business, various activities are unnecessary, such as cultivating customers' brand awareness, qualitative activities, investigation and interview, business public relations and so on.
Secondly, the second advantage of targeting existing customers is that if the company wants to strengthen its strength and stabilize its market position, it must constantly innovate and upgrade its business. When promoting these new businesses to new customers, marketing and publicity are difficult, costly and low in success rate. But once existing customers have a certain degree of trust in their suppliers, they usually give these new enterprises a chance to try and challenge bigger jobs.
Another reason for developing relations with existing customers is to improve production efficiency. A stable supply base enables suppliers to make long-term and large-scale production plans. The change of production plan and the frequent conversion of machines reduce the cost and improve the quality.
Finally, good cooperation with existing customers can greatly reduce inventory costs. Suppliers generally have a large inventory of finished products to meet irregular customer needs. Customers also have finished products to deal with suppliers' untimely delivery. Coordination and close cooperation between suppliers and customers can minimize inventory costs.
Understanding the importance of maintaining existing customers is a prerequisite, but how to carry out this work is another matter. Some suppliers keep complaining that they have spent a lot of energy and money trying to establish a partnership with customers, but they have no choice but to find any clues. What's the problem? What should be done around establishing a good and stable cooperative partnership? Now I'd like to offer an idea for your reference.
Customer relationship analysis-the starting point of an ideal partner.
The first thing most manufacturers should do when choosing partners is to establish a series of indicators to evaluate customers' credit status, financial strength, management ability and market operation ability, so as to meet the requirements of determining the best of these indicators as the ideal partner of the company. However, this method has a big drawback: the conclusions drawn from the above only describe the customer's situation to the greatest extent. However, there is no necessary connection between the strength of customers and their commitment to establish a good partnership with suppliers. Taking this as the standard of defining partners brings only the wishful thinking of manufacturers. Not every excellent customer expects to establish a relationship with the manufacturer through thick and thin.
So what kind of customers are the best partners? To solve this problem, we should start with customer relationship analysis. In the business dealings between manufacturers and customers, the relationship of this transaction is not always the same. Specifically, it can be divided into two categories:
1, transaction relationship. The most obvious feature of this kind of customers is to keep in touch with many suppliers and do business with them. Which supplier to do business with is largely based on some short-term interests. The reason for this relationship is that the cost of changing suppliers is very low, and even if the customer completely cuts off the business relationship with a supplier, it will not cause too much loss. In other words, such customers have little dependence on suppliers.
A client with a trading relationship is not suitable to be a partner. This kind of customers focus on whether the seller can provide timely products, price support, interest level and other factors. It is relatively easy to win such customers, but it is also quickly lost. The key is to emphasize immediate and cost-effective products or services, which is the direction of manufacturers' efforts.
2. Partnership. Contrary to transactional relationships, such customers will not easily change suppliers, and will take a long-term view of the relationship between buyers and sellers. When choosing a supplier, he will consider the ability of the other party to meet his own needs in the future, rather than simply focusing on the current ability and advantages.
Once the customer changes suppliers, the switching costs will include:
A. input cost. In the past business interaction with suppliers, customers have invested money, training and personnel to adapt to the manufacturer's products, services or business processes. The higher the cost of this investment, the more destructive it is to customers, and the less willing it is to change suppliers, which leads to switching costs. Once the customer is faced with the change of suppliers, it means giving up the previous investment of funds, personnel and long-term assets, which is the last thing the customer wants to happen.
B. conversion risk. The direct risk of changing suppliers often lies in utility, that is, whether the purchased project can achieve the expected effect within the expected cost range. Afraid of direct damage, the final effect is not ideal, which may be the reason why many customers are unwilling to change. When customers buy products that are very important to their own business, they have a strong sense of risk.
It is based on the above two factors that customers will not easily change suppliers. This relatively stable relationship is the cooperative relationship that suppliers dream of.
By combing the customer relationship, we can determine the target partner. Then the next step will shift to how to establish and consolidate this relationship.