Yesterday at a networking event a sales rep told me that her manager was planning to “strip her commission from all repeat sales”; thus, encouraging her to ignore current customers and only target net new prospects. The justification for this action is that the company “has too much repeat business”.
Seriously? Is it possible for anyone to have too much repeat business?
If the management team goes through with this proposed change they will reduce repeat business, maybe bring in enough new business to make sales even for the year but will have spent much more time attracting and closing that new business. In other words, their actions will dramatically reduce profits.
I think it’s a stupid idea but I am be curious about your opinion!
Dedicated to increasing your sales,
4 responses to “Manager wants to eliminate commissions on repeat sales. Agree or disagree?”
Good heavens! What could possibly be the advantage of discarding repeat customers! Happy customers are known for giving us new business through referrals. And this costs far less than any marketing campaign and carries much more credibility.
[…] Sell More, Work Less and Make More Money by Colleen Francis » Blog … […]
most companies would be very happy with “too much” repeat business – if there is such a thing
Why Customers Leave
We tend to insure almost everything in life: businesses, vehicles, buildings, people (i.e. life and health insurance, etc.) even our travels. Purchase an iPod, and the retailer will try to sell you insurance for it.
Why do we insure all these things, but all too often fail to insure the very thing that makes everything possible…our customers?
Author and lecturer, Tom Peters, in his landmark book, In Search of Excellence, demonstrated the value of “Customer Insurance.” He found that it required ten times more capital to secure new business than it does to keep the business you already enjoy. Think of it as $1.00 to get a new account and (only) 10 cents to keep an account you already have.
The unfortunate truth to all this is few businesses invest the money to keep their clients. Peters commissioned a study to find out why customers quit doing business with one company in favor of another competitive company. Here are the results:
• 1% Pass away
• 3% Move out of your market
• 5% Move the business to a friend or family member
• 9% Leave because of price
• 14% Leave because of a grievance that didn’t get handled correctly or quickly enough
• 68% Leave because of indifference/ They feel their business is taken for granted
This study has been performed several times over the past 20 years and the numbers have not moved!
We all have little, if any, control over the first four points which fortunately only total 18%. We can, how-ever, control the last two points which total 82%. The grievance issues are almost always a breakdown in communication and or a process, and are easily fixed if you act quickly. The 68% that leave because of indifference…now this is where Proforma can be of service to you and your firm!
We are armed with solid ideas that will help insure your customers’ loyalty and retention. Invest a dime to save a dollar. Now that’s great ROI!
Every business needs it.
We’ve got it!
Contact your Proforma Impact Graphics and ask about our 80/20 Business Protector Program and our other customer retention ideas. We can help you nail down your competition’s best prospects
Proforma Impact Graphics
291 Phillips Peak,
Highlands Ranch, Colorado 80129
Office: 303-683-0327 Cell: 720-244-2298 Fax: 866-274-1271