Firms often underestimate the risks and opportunities in current customer relationships.

The value of most companies is underpinned by the assumption that current customers will keep on buying.  Yet, in the drive for growth, most overlook the opportunity for growth from within and instead focus on prospects. Its common to offer exclusive deals and assume that tight exit clauses will bind customers.

Customers feel taken for granted and will try to exit as soon as renewal rolls around. In response, many companies resort to “saves” teams, desperately extending favourable terms to retain the unhappy customer.  In the process they set themselves up for grief next time around.

The Solution: calculate the value of the opportunity in your current customer base and you’ll want to put them first.

Most Australian companies are well short of international benchmarks for cross selling and tenure. And they have substantially fewer competitors to trouble them than their international counterparts.  Today, with advanced analytics, they are well positioned to more broadly serve customer needs and to extend the length of customer relationships.

And remember, your customers need the other products you sell. They already like you and have shown a willingness to buy, so they’re streets ahead of most unqualified prospects. Like life expectancy, the longer a customer stays with you, the more their likely tenure grows. And with each extra product, customer tenure grows by around 25%.  Every year, fewer customers will cross-shop when re-contracting.