One of the most frequently asked questions in our mentorship sessions at Eprenz.com is “how to sell services or grow my entrepreneurial business.” The question sometimes takes the form of how to use LinkedIn or social media to sell services or other variations such as how I convert a sales lead into a customer and write a message to prospects.
Just as the question has lots of variations, the answer also has several aspects. In this article, I will provide my experience in building multiple successful startups not only in growing sales but also how to build customer relationships that produce much more than the value of a sale.
Much of an effective customer relationship starts with your business model. A well-designed business model allows a business to build a trusted value-driven customer relationship which will ultimately grow sales and your business.
3 Effective Steps to Build Strong Relationships with Customers and Improve Sales
Step 1: Define your ideal customer and value proposition
The first thing I have done in building successful companies is understanding my potential customers and the value I intend to provide. Prior to starting a business, I develop my business model.
That includes understanding who is likely to be our best customer and, by default, who is not likely our best customer. Then, as a highly related topic, I define what value I intend to provide. That is our value proposition.
When asking aspiring entrepreneurs or early-stage founders to describe their ideal customer, they will answer something like, “I work with businesses and develop websites”. The challenge with that answer is it does not meaningfully limit the audience and it does not provide a differentiated service.
There are 400 million to 500 million entrepreneurs in the world. Good luck reaching all of them and selling an undistinguished service. While it seems appealing to sell to anyone who may buy, in my experience that model typically does not allow for rapid growth.
When I built my first professional business, I started by defining my ideal clients and the value that would distinguish me from my peers. I had many years of work experience in working with large multinational banks, but I decided they were unlikely to buy from a single person consulting firm and I was also tired of traveling all over the country to work with my clients.
So I defined community banks with at least $500 million and less than $5 billion in assets as large enough to spend money on my services and small enough to consider buying from a smaller firm. I also drew a radius of 5 hours drive from my home.
I had a few other criteria as well but that was my starting point. That still left over 600 banks in my market. From there, I eventually limited it to just 45 prospects and then to my top 15 of those 45.
Then, since I didn’t have sales training and I wanted to make an irresistible offer, I decided I would offer my services on a contingent fee basis. That is banks would only pay for the value they received after they could prove or verify the value I provided. That also made my services less price sensitive and not based on an hourly rate.
I was paid about 20% of the value I produced and could prove I produced. As additional key elements to my value proposition, I would use the banks own data to better build them a better understanding of their customers and I would use my MBA to help them make better financial decisions.
Over the next few years, I had meetings with almost all my top 45 prospects and did business with several of my top 15. In my first full year in service, I sold over $300,000 of work and built meaningful relationships which continued even after I sold that business.
Leverage social media to learn about your customers
While that story included cold calling, it is much the same with LinkedIn, except today it’s far easier to know your customers than it was when I started that business. In under 10 minutes a savvy business parson can study a LinkedIn profile and other social media activity to learn a prospect’s interests.
What articles have they posted or liked? What do they value as evidenced by their interests and entire work history? What is their education background? Do they support any common social causes? All these questions can be answered with a glance. It’s a goldmine of information to find common bonds.
I encourage using this to build authentic relationships not just sound bites. Find shared interests and show interest in your prospects. Read their posts. Learn about their values, interests, and concerns.
In a world where so much is automated, and many people automate LinkedIn messages, stand out by being sincere and interested in your prospects and customers. An automation tool can’t duplicate your human interaction with another person.
Even better, after reading their posts, comment on them with a thoughtful response.
Step 2: Build your customer’s trust
A quote from Author Bob Burg may best capture this.
All things being equal, people will do business with,
and refer business to, those people they know, like, and trust.
Continuing the story, how could I, as a startup business consulting firm, build trust with people who did not know me? What makes matters worse is I was doing much of this initially by cold calling.
Research to develop a special and positive customer relationship
The first step I took was research. I began to know my customers, not just the banks, but also the senior executive groups who would become my buyers. When I called banks, the fact that I knew them and the individuals I was calling built credibility.
Even when I sent postcards as part of my marketing program, I hand-wrote notes to each executive to praise them for their successes and recognize their community service. This little practice had my postcards get through the administrative staff and reach the executives, who read them and then visited my website.
Honor your word
The next thing I quickly learned was to honor my word. If I said I would call on Thursday at 2 pm, I called on Tuesday at 2 pm, not 2:30 pm, and not Friday. This built credibility with the administrative staff. They knew they could count on me. This seems simple but it’s very important.
This is also very important when we network with people. It’s common for people in networking meetings to say they will provide a lead or take an action. When we take that action, it builds trust. When we don’t, we lose trust.
Be cautious of your brand
Another important part of building trust is your brand. Today many professional services firms can operate from anywhere and don’t require the expense of a brick-and-mortar location. Building a website is quick, and inexpensive compared to building a physical location.
It’s important that your website builds trust by looking professional and having few or no spelling errors, broken links, etc.
This week I was meeting with a potential sponsor. When I visited his website, I saw the main menu overlapped the main content on the page. It was immediately clear to me that this individual did not have much of a business and I would not have trusted him with my business. In less than 10 seconds, he lost credibility even though I could have been in the market for his services.
If his website didn’t reflect care or attention to detail, would he have given my business care or attention to detail?
To be clear, I have definitely had spelling errors on websites and broken links before. They do happen, but they need to be very limited and they do cost trust. Take precautions to minimize them.
Step 3: Deliver value
I am certain my best future prospect will come from past customers or people who knew past customers. Your reputation is critically important. We all check ratings when we buy online from sites like Amazon, and while it may not be as obvious for professional services, building a business means building your reputation.
Past client relationships matter
For over 10 years, I tracked the source of all my new business. I discovered my #1 source of sales came from past clients or people they connected me to. In one example, I had a large company as a client with a relatively small $15,000 project that grew into a $35,000 project. A couple of years later, one of those employees changed jobs. He was seeking someone to do something similar for his new employer. That project ended up as over $250,000 worth of new work.
We recently launched a new service at Eprenz. I saw that despite delivering more than we promised in terms of our effort some clients were not getting a return on their investment. We could have easily ignored the problem or pointed to our commitment and let them know we over-delivered. But I knew we were falling short of their unspoken expectation. We immediately reviewed all customer relationships and looked at where we were falling short. Even though it cost us multiple times what we were paid to deliver the service, I met with my team and let them know we had to deliver a much higher level of service and value than what we had committed to.
I then met with our customers and let each one know that we were committed to making sure we delivered great value. These customers were fantastic with us. They appreciated our honesty and our commitment to their success.
Own your mistakes and shortcomings
Customers appreciate it. After your candid admission, recommit and find new ways in partnership with them to make them happy fans. When customers know you are looking out for their best interest and you care that goes much further than a few extra dollars on marketing to find new customers.
I remember a powerful and simple lesson in sales from a large consulting firm. The most difficult customer to obtain is a new customer with a new product or service. Conversely, the easiest customer to acquire is an existing customer with an existing service. Everyone makes mistakes, but when we make sure we deliver great value to our customers, sponsors, and business partners, our trusting fans become our best sales and marketing strategy. Happy customers are willing to go above and beyond for your business and will help grow your business.
Seek referrals from existing customers
Don’t be afraid to ask them if they know anyone else who might be interested in your service. This past year, one of our most consistent lead sources was a person who was a customer that we spent a little extra time with early in the year.
That little extra time early in the year led to many dozens of leads later in the year. When you find a great lead referral source like this person, keep them posted as your business changes, product or services change or as you refine your ideal customer.
A Summary of how to build customer relationships for effective sales
- Choose your customers wisely.
- Know your customers, talk to them and know what is of value to them.
- Build trust by doing what you say.
- Deliver amazing value.
- Let them know you are open to referral.