External Steps Toward Institutionalized Customers

Coffee with a client

In parts one and two of his series, Dave Mantel explained what institutionalized customers are, why they're so good for your business and how to take steps inside your company to create them. In this third and final installment, he looks at the external steps that lead to institutionalized customers.


Enlist Your Customers

Invite your customers into your company’s endeavors and ventures. Create focus groups and user groups when implementing new technology, capability and workflow experimentation. It’s likely that added capability is market-driven when it’s focused on ahead-of-the-curve initiatives. In this case, the opportunity to align with customers through their participation in your process will shorten your organization’s ramp-up to proficiency and create stronger relationships with your customers because they’ve become important contributors.

For example, having been a part of a forward-thinking commercial printer, my company became the first in its market to take the leap into electronic prepress capability. This had the potential of falling flat. What made the difference between success and failure was the selection of key clients — who were early adopters themselves in this area — to join with us in our suffering through what would be a steep learning curve wrought with mistakes, frustrations and massive production delays. The endeavor was a huge success and, depending on who you ask, a lot of fun. What cannot be denied is that the by-product of becoming proficient was the creation of completely institutionalized customers for whom great struggles would be in store should they attempt this new workflow elsewhere. They built the platform!

Thin the Herd

You’ll never institutionalize all of your customers. In fact, after all this culture change there may only be a handful of customers you could truly say are institutionalized and fewer still who will admit to it. When considering a conscious effort toward institutionalizing customers, realize most companies’ revenues can follow the 80/20 rule, meaning 80 percent of your revenue comes from 20 percent of your clients. Applying focus in the proper areas can keep your organization on track.

Institutionalizing your customers takes effort, so begin in the obvious place, which is with your top 20 percent. These are the customers who, if aligned properly, will be the basis for changing your company culture. When pursuing new customers, target those organizations which have like qualities in the highest impact areas.

Next, take a good hard look at the 80 percent. Ask who in that group should be bringing a greater amount of business and what it might take to move them to the top and then into what you can call institutionalized. Make a plan. Make that plan public throughout your organization. Set goals. Be accountable.

Finally, there are and will always be customers who don’t fit into the two categories above. If the business is profitable and well-aligned, maintain that business under the guidelines of your newly developed sales culture and serve them as well as possible. For those who remain, it’s probably time to admit the relationship is not a very good fit for either company and part ways friendly and professionally.

The Win-Win of a Cultural Shift

Obviously, there are more elements to creating institutionalized customers that what we’ve discussed here. Your vendor relationships as they pertain to your customers make up one element which is an entire project on its own. However, there is enough here for you to ask, “What if it doesn’t work?” To which I’d respond, “What if it does?”

If it does work, we can refer to OneAccord Capital for the multiples when it’s time to start thinking about exit strategies. And if it doesn’t work, creating this customer-focused culture in your business pays off quite nicely in increased revenue, customer profitability and lowered cost of sale, along with a sheer shot in the dark that running your business will be much more fun and satisfying.

Ultimately, you can’t go wrong.

About the Author

Dave Mantel Portrait Dave Mantel is the founder and president of Acme Sales Development, LLC, a Seattle-area sales development company focused on increasing and sustaining topline revenue.

You can reach Dave by email or call him at (206) 948-1526.

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Published: 08/21/2017

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