by Alyse Hart | February 14, 2012 10:27 am
Buying a business is a huge commitment, and before the ink dries on the contract, it’s easy to focus on the upside—the promise and possibility of a strong return on your investment as well as the retention of the existing customer base. That’s why getting off on the right foot with the existing clients or customers is job #12.
The biggest sales job you will face is in reassuring them that things will be smoother (tricky, especially when they thought it already was); that nothing will change (they wonder how that can be since a new owner always means change); or that there will be improvements (they wonder what kind—and do you really know what needs fixing?)
Customer relationship management. This is your challenge. The challenge is communication and nuance. What should you say? When and how much sharing is really needed? The way in which you handle this determines if you will have to scramble, or if you can really enjoy what was promised—a healthy stream of customers.
There are four things to be aware of that may sound simple at the offset, but pulling them off gracefully is a challenge. Doing it well will make the difference between retention or total reinvention and restart.
Communicate or die. Dramatic indeed but you were educated to be a doctor, lawyer, and accountant or fill in the blank and name yours. And you are knowledgeable, maybe even brilliant, on your subject. Once you purchase a business you need to add the title of seller, soother, educator and grand communicator, too. Your clarity, authenticity and warmth will make up for any perceived missteps in your customers eyes. There will be times when you will have to eat humble pie or crow. Plan on it. Accept it.
Customers hate change. They will compare you to your predecessor right away and might even look for ways to leave. Any mishandling will be grounds for replacing you because their allegiance was with the last owner. Let’s face it, you are auditioning. There will even be some cases where the client wasn’t happy in the first place and didn’t have the nerve to leave the previous owner, so you can be a welcome change.
It’s cheaper to keep them. It’s pricier to replace customers than it is to keep them. Wooing works as long as you don’t use vacant words and can back up what you day with something delightfully unexpected.
Transition is everything. The support staff is an extension of you—their proficiency in wooing, wowing, calming, and smoothing should not be underestimated. They can help or harm your transition process. It is a smart move to keep one or some of the key staffers to make the change less jarring. Frank conversations with them will lay the foundation of how cooperative they will be with you. You can help plant your story with them so instead of idle gossip and hearsay they will be your best brand messengers.
Keeping customers happy doesn’t require elaborate schemes or for you to change your personality unless you want to. Customers want love, attention, respect and the S.H.E method: Share, Help and Educate. It will take you far. •
Dr. O was a seasoned Park Avenue dermatologist with alternative healthcare leanings. He was ahead of his time, humble and had graduated from an Ivy League school. He enjoyed his own blend of East/West healing modalities. Because of this, he received accolades from Prevention Magazine and had a brisk practice concentrating on acne treatments and hair loss. Alopecia was his specialty and most of his clientele were women. He earned most of his revenue from office visit charges and his custom injections. It was more than enough for him and his wife, who was his receptionist, and they owned the office space (a condo) in the building. As he was nearing the age of 80, he decided to retire and sell his practice to Dr. N.
Dr. N was young, handsome and ambitious. He was buying a tony location and hoped to piggyback on Dr. O’s international recognition. Dr. N wanted to expand on product offerings, remodel the office, hire beautiful front desk women, write a book and add an anti-aging twist to the business. With most of Dr. O’s patients coming in for hair loss and acne treatments, he estimated that he’d probably lose upward of 50 percent of the clients within the first year. He didn’t mind since he would still be able to cover his overhead. He become acquainted with clients and kept some of Dr. O’s potions, which included his unique hair retaining injections and more.
The initial month was spent with the two doctors seeing patients together. Dr. O introduced Dr. N to patients and openly offered his blessing while praising him.
After a three-month transition, Dr. O’s presence was tapering off. New patients had been directed to Dr. N and existing clients were making up their minds whether to try him out or to go. Dr. N recognized that he needed something to entice existing patients to stay, so he offered beauty packages for hair and skin restoration. The packages involved a flat monthly fee for three months. This enabled him to guarantee his own cash flow. If patients started to balk, he was comfortable reassuring them that “they were worth” the small investment. It was a risk and he enjoyed the reward—they said yes.
As the office brightened and he started to display private label products, he began gifting samples to the existing clients, and it worked some of the time. What Dr. N lacked in warmth and age, he made up for in hiring great staffers. They were the ones who knew how to sell, compliment and coddle. Dr. N went on to be written up in many fashion magazines in New York as a skin authority to supermodels and mom’s alike. •
Unified Tax and Planning Company was founded, owned and operated by Joan for 15 years. Joan was a feisty personality whose experience came as a bookkeeper turned Certified Tax Preparer. Although she wasn’t a CPA, it didn’t matter to her clientele. They knew she could take on the IRS if any of her clients were called in for an audit. She made a respectable living, enjoyed teaching workshops and did a lot of public speaking at every Chamber and women’s group within 25 miles of the office. Her kids were grown and she wanted to relocate, so she sold the practice to Eric.
Eric had made wise real estate investments and had retired 10 years earlier. He had become itchy after playing lots of golf and babysitting the grandkids. He was smart, personable and genuinely excited about returning to a business. However, at his age, he had no designs on running around as much as Joan did. Instead, his plan was to audition and win clients over, keep the receptionist and office staff, keep the look of the office the same (down to the pictures on the wall) and offer more year-round services.
His transition execution was impeccable. He diligently went through all the steps mentioned previously. Joan, on the other hand, didn’t do as well. She sent out the cursory introductory letter and said nothing would change. Together, Joan and Eric isolated the 10 most valuable clients and jointly met with them. But during the meetings, it wasn’t a gracious hand off. It became clear that Joan was having a personal ego struggle.
Clients liked Eric and he was answering their questions deliberately, and educating them along the way. This was something Joan didn’t previously do. She would say, “Don’t you worry, I will take care of it. I know what I am doing, so you don’t have to.” In contrast with Eric, she seemed patronizing. Eric was the model of solid and dependable. He was comfortable talking to people and had a well-balanced, logical and intuitive sense.
Eric asked Joan to leave the firm earlier than expected. But the Unified Tax client retention was a success and still is to this day. Here’s how he easily sold his clients:
Some of the feedback his female clients gave were: He really cared; he didn’t really need the money so he wasn’t obnoxiously hungry; he focused on them; he remembered babies, grandkids and asked about them. Feedback from men included: He talked a bit more about new tax codes to show competency but not too much to bore; he shared what he did in retirement; he demonstrated his enthusiasm to own the business and serve and swerve clients away from having to overpay taxes.
Eric was a “salt of the earth” man who helped with pre-tax planning, money management, and who was respectful of time. He sent out helpful checklists in advance so the appointments would run smoothly. He allowed enough time in his meetings so he never appeared rushed. And he held Joan’s rates for at least a year. Not only did he retain most of the client base but also he continued to add to it through referrals. •
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