🔒Tips for retaining your top customers

Your largest customer just called to tell you they are changing vendors.

Your price was too high, service no good, they no longer buy this product, whatever the reason, this is not the start of a good day.

Now what?

Well, the answer depends a lot on how well you have prepared for this possibility. Strong roots are vital to a tree in the face of a storm, but you can't grow new roots in time when the dark clouds are in the sky. Preparation is the key to protecting your company from this type of phone call.

The first rule of customer retention is to know your customer. Your business may have 10, or thousands of customers, so how do you focus?

I recommend keeping close to the customers generating 80 percent of your revenues, or at least the top 20 percent of your customers. If that is still too many, focus on your top 25 customers.

Creating a key account file for each of these top customers is a great tool.

Here are some things you should keep track of:

Who are the customer’s main contacts?

Who is the main point of contact and what is their contact information? If this person is not the decision-maker, identify that person as well. Similarly, it is important to identify those people to whom the buyer and decision-maker report.

I have had clients who deal with low-level people at large companies and when there is a problem, they are unable to reach higher-level decision-makers to discuss an issue.

Finally, it is important to have more than one contact from your business that has met these key people. These are your top customers and being prepared to handle personnel turnover is critical.

Know your customer’s business

How does your customer use your product or service in their business? Is your product critical? What other options do they have as an alternative to your product? What is happening in your customer's world?

Make note of the general trend in their industry, like whether or not it is growing or shrinking.

Who are your customers' customers? How financially strong is your customer? Do you have a complete credit file?

Knowledge is power and the more you understand your customer's business, the better prepared you will be to support them.

Know your competitors

Why was your company selected as the supplier to this customer? Were you the low-price supplier, or high service? Is your product unique? Do you know your main competitors and what the key selling points of their products are?

Your competitors are speaking to your top customers, so always be prepared to defend your position.

Have an action plan

Outline your goals for the relationship and how you plan to reach them. Who will be visiting the customer and how often during the year? When will the president go out to meet these top customers to let them know how important they are to your business?

If this customer doesn't provide a “supplier scorecard” think about creating your own to present to them. Let them know what you have done for them this year and how you rate your service on some objective scale.

For instance, were your deliveries 100 percent on? If so, reinforce this. Also, take the time to identify social activities that you may enjoy with your client. Take them out to dinner or a sporting event. Put this in the plan so it doesn't get lost in the shuffle.

Top-performing companies will maintain a key customer file, which also includes profitability analysis on the items purchased by the customer. At a minimum, it should be updated annually, but quarterly updates for the largest customers will reduce surprises at the executive level of your business.

Roy Filkoff is a CPA and partner with Altman and Company LLC, a turnaround, restructuring and crisis-management services business.