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While most companies use a "sales and marketing funnel" for pipeline management, typically a complementary, disjointed "retention funnel" operates by default. Yet retention is where the money is. Some 80 percent of revenue for most companies is from repeat or referral business. Managers who improve that retention number even slightly see a significant impact on profit. Enlightened managers start by consolidating all customer support into a new function devoted to customer retention. Retention activities are expanded to be as proactive, sophisticated, and deliberate as those in Acquisition and Closing.
In advance of investment in implementation, strategy alternatives and related tactics are evaluated in a probabilistic model for profit generation potential by anticipating what will happen in execution. What tactics will be needed to move a prospect from Acquisition to Closing, from an initial purchase to partner status? How will the interactions flow? The model compares anticipated results by estimated conversion rates and cost-per-contact in each stage, retention rates, referral rates, and Customer Lifetime Value (CLV) for profit. In execution these metrics are confirmed and augmented by a real-time data stream of customer relationship metrics, based on measuring what interactions actually occur to carry out the tactics. For more about our framework, please see Voice of the Customer Helps Establish Relationship Status. Or our CEO's new book Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing. Take a look at Chapter Three. |
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