I recently ran into a situation where a long time customer was coming to the end of their agreement. Instead of automatically renewing they decided to do their due diligence and reach out to some colleagues and competitors to make sure that (1) we still have the best product on the market, and (2) that they were still getting a fair deal.
Many sales people will say that because this is happening I must not be doing a great job of account management. I am not keeping my customer happy if they are interested in looking outside of our relationship.
I can understand them thinking that. However I had no problem with them looking around. In fact I encouraged it.
This might seem counter intuitive, especially since I view losing an account like a punch to the face. The thing is that I wasn’t worried about losing them as a customer. I know we have the best software product on the market, and I know that they are getting a great deal.
Their operation has very specific needs to which we were very adept at handling.
There are a couple of reasons why I believe they thought it was necessary to “look around” though.
1) They want to make sure they are not paying too much.
Fair enough. I’ve seen in this industry where companies will enforce massive uplifts each year while an organization is under contract. This is one of the reasons I have some of the new customers I have today. They were fed up with those large increases.
Non-disclosure agreements aside, I knew that by looking around they would see they are getting a fair deal.
2) They were hoping I would offer them some substantial discount on their renewal.
Sorry but like I said, I already knew the were getting a fair deal. There was no reason for me to lower the price (and perceived value) of our offering.
Additionally our offering was substantially less then they would find with any other provider since they didn’t have to worry about additional costs like implementation, consulting, hardware upgrades, and training.
Notice that I didn’t mention that finding the best software was one of their reasons to look around. I knew they could ask around and in terms of the functionality they needed, we are the undisputed champion. One day this may change, but for now, in that market, we reign supreme.
Why I Encouraged Them
I mentioned earlier that I actually encouraged them to look at what else is out there. I knew that we would still be the strong choice given all the factors that were truly important to them.
The reason I did this was because this was an opportune time for me to get some referrals.
Remember how they mentioned they were going to reach out to their colleagues who used our competitors? Well that means they were going to talk to other company contacts who could potentially use the software I sell.
Use It To Your Advantage
So when my customer said this I used it as an opportunity to meet some new people and make some friends.
I told him that was a great idea.
“You should absolutely look at what options are available.”
But I did this with an agreement that’s effective as soon as he decides to continue our partnership. I said,
“Mr. Customer, I think it’s a great idea for you to see what other solutions are out there. It’s important that you have a system that meets your needs and can get you up and running in time to manage all your audits and various policies relating to your industry. Those are coming up quickly so you need to be ready.
I’ll provide you with any information I can about MRI to help you compare our software with any other.”
Here’s where it gets good.
“Can I ask you a quick question though? When you decide to stay with MRI I will assume it is because you found in your research that we are still the best offering. Do you Agree that would be the reason for staying with us?” …yes…
“Great. Then based off your research I’d like to ask that you introduce me to those colleagues of yours that you reached out too using the other softwares. Whether they are in the market to move from another system or not, it would be great to simply put a face to the name. Does that sound fair to you?”
You see I am using this “looking outside” as an opportunity for referrals. I am not freaking out that they might leave me. I am not being pompous to them. I am encouraging them to look around so that they can feel confident in their decision to stay with us.
What are your thoughts? What do you do when a customer says they are thinking about leaving you?
Let me know in the comments below.
~ Johnny Bravo
Image courtesy of Ambro / FreeDigitalPhotos.net