There are many ways to look at your business. Looking from the financial (profit) perspective is one obvious choice. Looking from a customer service perspective is another. And looking at your business from a sales perspective is yet another.
Now consider what your organization looks like to clients and prospects. They are not likely to care much about your profit. So when they look at your business, they’re probably going to see you as either a sales organization or a service organization.
What are these things? Well, simply put, a sales organization is driven by sales. Internally, they strive to reach specific sales targets. They have a dedicated sales person (or team). And a good deal of their revenue goes to support the sales department. It is very likely that a sales person is the highest paid employee in the company.
A service organization has sales, of course, but is driven primarily by service. The highest internal goals are around response times, technician utilization, and the profitability of projects. The emotional center of the business is the service department and the Service Manager is likely to be the highest paid employee in the company.
From a client’s perspective, it’s pretty easy to see where your heart lies. If you call them more often about sales than you do about service, that’s a big clue. If they avoid meeting requests, that’s a big clue. If they leave you and go to the competition to save $50/month, that’s a big clue.
Sales organizations tend to have three powerful tendencies – all related to one another. First, they have high client turn-over. Second, they have low customer satisfaction. Third, they are constantly focusing on new clients at the expense of existing clients. At the root of all of this is simple math.
Let’s say that you have a sales person whose personal target is to take home $100,000 per year. Given industry standards, that’s about ten percent of revenue or thirty percent of profit. In either case, it means she has to sell about $1 Million worth of goods and services each year. And that’s new sales, not residuals from existing clients.
If your average new client is worth $10,000 in project revenue and another $10,000 in managed services, that means you need fifty new clients each year. How do you do that? Well, you engage the service department in delivering the promises that have been sold. Sometimes they can’t deliver what’s been sold because the client has been over-sold.
The result? High client turn-over, low customer satisfaction, and a focus on new clients over existing clients.
But wait. There is good news.
Remember I said these were very strong tendencies? You can still have a sales organization in which the service department is not hi-jacked by the sales department. But you need to work to consciously avoid this tendency.
In order for a company with a strong sales department to remain a service-focused organization, you need to raise the profile (and probably the budget) of the service department. Here are three things you can do to build a service organization with a strong sales department.
The biggest threat to long-term financial health is client turnover. Once you build an organization with high client turnover, you are almost doomed. Why? Because it’s hard to stem that tide when sales slow down. If you have an equilibrium of new clients to departing clients with a sales-focused organization, the sales can never slow down.
For example, let’s say you gain fifty new clients per year and lose twenty of them the minute their contracts expire, plus another ten “older” clients. That means you have a net gain of twenty clients. But when sales slow down, there’s no reason to be that the departure of dissatisfied clients will slow down. And if sales stop for some reason, you will have a net loss almost immediately.
If you have a well-balanced, successfully-growing business, the focus will naturally be on the service department. At the end of the day, you are a service business. If you deliver good service, you will keep your existing clients. They’ll be happy and renew their contracts. They’ll stick around long enough to become a regular stream of revenue for hardware and software in addition to managed services.
That balance comes by spending some of your increased revenue to make sure you have an excellent service department that’s not over-worked. Remember, when you value service over sales, everyone can see it – inside your organization and out.
If you’re a small I.T. shop, you might think that you are too small to have such worries. You might not even have a sales person. But there are still behaviors that let clients know that you consider sales to be more important than service.
Think about yourself wearing all the hats in your company. How often do you put on the sales hat instead of the service hat? If your clients always see the sales person in you first, they will see your company as a sales organization first.
When your company is small, it is particularly important that you lead with service. Put on that service hat during the sales meeting. Start to build the service relationship. And, of course, focus on service and long-term planning after the client signs the contract.
One of the best “Standard Operating Procedures” you can have is an outline of your first service call at a new client’s office. Make it a small and manageable job. Look at – and document – as much of their network as possible. Arrive on time. Bill for exactly what you agreed on. Finish on time. And so forth.
In other words, put a big focus on making your first service call a great, positive experience for the client. Make them love you and it will start off your whole relationship moving in the right direction.
Remember: Sales is about you. You want their money. Service is about the client. No matter how large or small your organization, you should work hard to make the client feel that they are the center of attention. Make them see the service focus of your business at every stage in the relationship.
When the client knows that service is your first priority, they trust you more. They are happy to see you. They believe they’ve made the right decision to trust their network to you. And when you say they need to buy something, their first reaction will be to do what you recommend.
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