Guest comment: How to capture and keep your customers

By John Dixon

Having worked across a number of sectors prior to joining the translation industry I have been in a position to watch the supplier and customer relationship evolve over the years. Gaining experience in delivery roles in various companies has allowed me to identify the different tools that are used, successfully and sometimes unsuccessfully, to target customers, which is useful when considering how each could be applied to the localisation industry in which I currently work.

One of the key fundamentals to success is how to attract and, more importantly, retain your customers in a cost-effective manner. The cost of customer acquisition and retention should be one of the key measures for any organisation but often isn’t a focus as generally we do not accurately record the true cost of sale, so it isn’t necessarily going to be reflected in the monthly balance sheet. So, how much money could companies save by reducing the financial and time investment associated with identifying and securing new customers, and focus more on increasing business from existing customer who may be the target of advances from the competition?

Over the last few years I have observed a number of organisations moving away from traditional selling techniques and harnessing the opportunities being presented by new strategies, such as social media and marketing. Apple has been very clever in driving customer demand by creating huge volumes of interest of around its products. Despite being a niche provider the business has used various overt and covert marketing techniques in recent years to make sure its products have pulled in the early adopters, through a series of information leaks, who then generate the mainstream demand.

Was it any coincidence that just before Apple announced their recent financial results it transpired that one of their research engineers happened to “accidently leave” a version of their prototype new 4G phone in a bar, which was then picked up by a person who also just happened to know which online publication would want it? This series of events just happened to propel more hype and potential demand into the consumer market.

For other companies competing in a commodity-based market, the main aim is to differentiate their offers in such a way that customers are beating down the door and in this current tough economic climate you have to be realistic and recognise quality is no longer driving sales – it’s now much more about cost and response times. Those that have addressed this, in any industry, will most likely be emerging from the recession a little bruised, but still trading and with a loyal customer base.

This focus on keeping costs down and reducing turnaround times means, in my industry, that we can expect to see a clamour of companies announcing their intentions to move towards delivering solutions via machine translation and post editing of machine translation, to reduce cost of human input and potentially increase the speed of delivery. Translation companies will need to start differentiating themselves in this way and be able to demonstrate a solid delivery track record.

So, are the buyers going to be interested in the potential “hot air” of a sales man or a glossy brochure? To be quite honest it’s my belief that that buyers are now going to want to see the whites of the supplier delivery team’s eyes and have an open and honest dialogue about what is possible, without being constantly told that machine translation shouldn’t be considered an option.

The industry took a while to adopt and embrace translation memory and the speed of adoption for machine translation will be so rapid that some suppliers may get left behind. Therefore the companies that have been flexible enough to recognise the changing demands of customers and respond accordingly will be ahead of the game in being able to demonstrate their capabilities and attract more potential customers, more quickly than the competition. In addition, the suppliers who offer more services can become the one stop shop.

If you take this idea one logical step further and you are relying more on word of mouth and reputation to attract customers, can you save on sales effort and rely more on marketing and the dissemination of information? If you can then look to reduce your sales overhead with the resulting cost savings being be passed either to R&D or on to the customer. This would potentially leave translation companies with a much leaner organisation. There will, of course, still be the need for some element of sales, possibly on more complex deals but for the more commodity type buys this could be significantly reduced for a number of industry players.

In addition, if your customers start coming direct to your business then you have to consider the potential savings from both the customer and supplier side in the fact that you may no longer have to go through lengthy and costly procurement exercises and instead being able to focus on excellent service delivery. The days of striking a deal may be coming back.

To satisfy the requirements of the customer who may be getting value for money from you, you may have to consider a partnership approach rather than a supplier vs customer relationship. Therefore you may want to look at different methods of contracting such as cost plus or open book. This gives the customer the confidence that they are not getting “ripped off” and in addition gives both parties comfort that they have equal skin in the came. The other potential alternative is a risk reward contract. If you have some new solution to a customer problem then you may want to consider a way in which you both can accurately measure and get rewarded for the return on investment.

In my opinion both of these contracting options mean that you are building a partnership with your customer and as such strengthening that relationship into a trusted advisor role. You are then moving into the realms of using that customer as a glowing reference for any future work with potential customers. There is nothing better than having a “raving fan” and some customers want to make sure that you have other satisfied clients who have had a great experience too before signing on the dotted line. Having ‘brand ambassadors’ out there in the market is a natural extension of your sales function. The next step from this is to ensure that you cross sell other services to the customer as a “one stop” service organisation.

As consumers, you will find that brand extension is a common occurrence and as such is the natural progression. This will give you a bigger footprint with the customer and therefore a more “sticky” service offer and as such there will be an amount of inertia from the customer to move away from your service offer. This is a topic that I fully expect my competitors to be discussing at the Globalization and Localization Association’s Language of Business conference, 10 – 12 May, in Prague (www.gala-global.org/conference), as they will all be considering the ways in which they can improve their sales approach without neglecting existing customers.

With such a challenging environment you need to look at a more holistic approach to capturing customers and making your offer more attractive – create more of a partnership with your customer and become a trusted advisor; it will get you more loyalty in return.

John Dixon is service delivery director, of Applied Language Solutions, a Globalization and Localization Association member