The Benefits Of Customer Satisfaction

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Jun 192011
 

Customer satisfaction is valued highly in almost every commercial organization. Especially large firms spend an enormous amount of money on customer satisfaction programs. Therefore, an important question is: What are the benefits of customer satisfaction for the supplying company? A common assumption is that satisfied customers are more loyal in the sense that they stay in a longer relationship with the supplier. However, marketing research has proven that this linkage is not always so strong and that it largely varies by customer segment and industry. Therefore, vendors and service providers should not rely on such effect, also because the stand-alone value of customer loyalty is not very clear as I will outline in one of … Read more

Effective Channel Management (Part II)

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May 232011
 

As mentioned in Part I of this article, the two elements of an effective sales partner program beside the revenue commitment are: A plausible categorization of the partners into the various partner levels Attractive program-specific benefits for the partners Probably 90% of all partner programs offer the three partner levels Silver, Gold, and Platinum. So, if you design a new program, you can be a bit more creative in naming the partner levels. Sometimes it can make sense to have more than three levels, but that really depends on how fragmented your partner base is. I think it should never be more than five, because then it will begin to be confusing for the partner. … Read more

Effective Channel Management (Part I)

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Apr 172011
 

High-tech Sales is often direct but almost always also through partners. Especially for smaller accounts or customers, to which you don’t have easy access (e.g. because of the geographic distance, your positioning or company size), it can be very effective to address such target customers through partners. However, that requires an effective channel management. One success factor in channel management is a partner program. A formalized partner program mainly serves two purposes: You signal to the market that you have many interested partners, in fact so many that you need to manage them through a generic program. That message makes your company appear very attractive for partners and gets them interested in learning more about … Read more

How To Do Pricing Right: Price Strategy For Start-Ups

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Mar 132011
 

In start-ups there is a constant fear by the top management that the prices might be too high and therefore not enough customers will buy. Along with this there is always a tendency to reduce prices or to offer large discounts, in the false hope that this would accelerate Sales. The reason for such fear usually is that price confidence is still low because prices are not established in the market yet, and – again – a wrong understanding of the demand curve. Start-up managers too often assume that low prices will lead to more revenues. Therefore, they try to win new customers by all means, at literally “any price”. However, “price fear” and the … Read more

Sales Myth: #3 – Customer Acquisition Is More Expensive Than Retention

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Feb 132011
 

Everyone in Sales (and probably everyone in business) has heard the truism that customer acquisition is three times more expensive than customer retention. That is such a high-level statement, it is hard to say what it relates to and what to take out of it (by the way, if any of you readers knows the origin of this myth, please let us know and comment on this article). Costs for customer-related expenses in such a comparison can only be accounted in total, meaning for the entire customer lifecycle, or per customer transaction or purchase. 1.       Total Customer Lifecycle Let’s first look at this from the high-tech sales perspective: Presales time in high-tech sales is usually … Read more

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