The importance of understanding your customer
One of the key principles of our business at BlackBridge Investments is that the plastic recycling trading industry is not just about materials – it’s about relationships. With that in mind, it is especially important to understand your customers, particularly when you are a broker. You not only have to understand the person you’re buying the product from, but also the person you are selling to. If you become successful at fulfilling both parties’ needs, then you have established a relationship with your customer. Your customers now trust that you will provide them with the same reliable level of service over and over again. If you want to make money in the long-term, customer retention becomes extremely important for building a book of business.
Establishing a Relationship
Establishing a relationship with your customer begins with getting to know each other and establishing rapport, based on the right balance of conversation, including some “business” and “personal” topics. You don’t want to bore your customer to death with your broad vocabulary or repetitive questions. Remember that you’re dealing with humans who have actual lives outside of the business world. Ask them questions about how their day is going, something humorous that happened, or a common interest – find out if they’re a sports fan, ask if they’ve got any fun plans coming up, ask them if they’ve traveled anywhere interesting recently. This helps to establish a memory key for you, and your customer. Next time you think about a material you need to buy, you will remember that conversation you had with “John” who likes hockey who is always selling that one particular grade of material. This doesn’t mean that you should be talking in slang, and cracking yo-momma jokes; just act professional and remember that you are dealing with real people. Building business relationships should be fun! We’re all trying to make connections and ideally we all want to work with people who we like “as” people. It’s not always “just business.”
Asking the Right Questions
Asking the right questions is really important for sales, and this is particularly true for the plastic recycling trade. You always need to find out certain information about a product in order to buy/sell it. Such as the kind of quality, price, weight, or how it was produced. The key is to ask those question in a conversational way. If you just ask question after question you begin to sound robotic. Ease up, communicate and flow into the conversation slowly. Always let the customer speak. They will most of the time know what type of information you need already and will readily answer most of those questions by just having a standard conversation with them.
Focusing on Lifetime Value
One of the most underrated aspects of building business relationships is “lifetime value of a customer.” Think about how much business you might do with a typical “good” customer in a given year – then multiply that times five years or ten years or however long you want to be in business. Your customer relationships are HUGELY valuable to your success. Many traders make the mistake of focusing on single transactions – they might be reluctant to lose money on a deal or sacrifice profit margins or make an extra effort to get a deal done. However, if you can build up a great relationship that stands the test of time, isn’t it worth it to be extra generous or allow yourself to be a bit inconvenienced on a few rare occasions?
Transactions come and go, but good business relationships can endure for years – delivering many thousands of dollars of lifetime value. Don’t underestimate the value of a great business relationship. Even if you have to let some transactions go, or forego certain opportunities that aren’t a good deal at the time, it always pays to keep in touch with good customers and trading partners. Understanding lifetime value can be the most important sort of “understanding your customer” that you will ever do.