The Relationship Edge: The Key to Strategic Influence and Selling Success, Third Edition

Chapter 12. MAINTAIN YOUR MEANINGFUL RELATIONSHIPS

To maintain your meaningful relationships, you need to:

• Understand the lifetime value of a customer.

• Make the time to maintain important relationships.

• Help others succeed.

• Keep in constant contact.

Let's look at each of these.

Exceptional business and personal relationships are relatively rare treasures. They will have a lifetime value if you maintain them properly. Although they are incalculable, I should talk for a moment about calculating customer lifetime value.

The theory of customer lifetime value assumes that it is less expensive to retain customers than to find new ones (almost always true) and that it is possible to estimate how much a customer will be worth over an extended period into the future (less certain). Retaining the right customers should always be a business priority, although some companies obviously have problems doing so.

The Forum Corporation analyzed the customers that 14 major companies had lost for reasons other than leaving the area or going out of business. It found that 15 percent switched to a better product, 15 percent found a cheaper product, and 70 percent left because of poor or little attention from their supplier.^[25]

A company that looks at its own churn rate—the number of customers who walk away every year and who have to be replaced just to maintain the same revenue—can calculate how much revenue and profit it is losing by those defections. There may not be much you can do about customers leaving ...