Your company today is wasting much of the potential of your customer base. Your client base could generate you much higher income. This is a reality for practically all companies. Why is this happening? Simple: companies tend to focus their management on the sale of their products (goods or services) without paying attention to how much more profitable their customers could be.
Precisely, to help companies make their client portfolio profitable, Pablo Fernández developed the 6R model, a profitable growth strategy implemented in a large number of companies of various sectors in different countries.
The 6r’s of marketing
Each of the “Rs” represents an aspect of your relationship with your customers. By analyzing your company from the perspective of each of these, you will detect opportunities that are latent in your business today. Let’s see what they are:
Like products, customer relationships can be designed. We must go from “spontaneous” relationships (in which the customer comes to buy what they want, when they want), to “managed” relationships, where the company seeks that its customers go along a path of preset growth.
Every client represents an income stream that develops over time. The longer it lasts, the greater the portion of that income the business will earn. In fact, the average income generated by clients increases with each year of relationship. This makes the profitability of companies more dependent on their ability to retain than to attract customers.
Every customer could be more profitable than it is and it is the responsibility of the company (not the customer) to achieve this. Customer profitability can be increased by increasing their activity, or by proper price management. It can also be increased by managing the costs of care. An interesting chapter is represented by unprofitable clients. In this sense, it must be remembered that it is easier to make a current customer profitable than to attract a new one.
EVERY CUSTOMER COULD BE MORE PROFITABLE THAN IT IS AND IT IS THE RESPONSIBILITY OF THE COMPANY (NOT THE CUSTOMER) TO ACHIEVE IT.
Personal referrals represent the most important source of new clients for companies and are free. Therefore, we suggest companies include referral promotion actions within their communication mix.
Customers do not abandon companies because of mistakes, but because of the lack of response after them. Therefore, effective follow-up action can help retain a customer and the revenue stream that customer represents. This is often called “service recovery.” The company must anticipate its responses to the most frequent problems and not leave them to chance.
CUSTOMERS DO NOT LEAVE COMPANIES DUE TO ERRORS, BUT DUE TO THE LACK OF RESPONSE AFTER THEM.
It is easier and cheaper to reactivate a relationship with a former client than to generate a new client. Therefore, actions must be taken that systematically allow to reactivate the relationship with those clients who fall into inactivity.
Your company will surely find significant growth opportunities in each of the “Rs,” as many companies in Latin America have done.