Why is retaining customers important? Let’s start by making a couple of general statements about running a business.
Any business owner would agree with me that the aim of the business is to generate profit; preferably lots of it.
Before that can happen though, the business must have an income.
- Revenue comes from making sales.
- Sales come from customers.
- Repeat sales are made to satisfied customers.
- Profits come when overheads and costs are less than sales revenue.
It stands to reason that in order to make profits, the business needs to find and keep customers.
To continue to make profits, and for them to increase, you can either reduce overheads or make more sales. The truth about reducing overheads is that you can only go so far – cut the phone and power bills, reduce other expenses but that may reduce costs by 5% which really doesn’t make much difference to the profit line – so all you can really do is sell more or buy better. Buying better isn’t all that easy, so the solution is to make more sales.
Any business without customers won’t be able to put a single dollar in your pocket. It won’t matter if you have an honours degree or the best product on the planet. No customers = no cash flow.
For the sake of simplicity, I want to focus on the customer aspect. After all, without the customer, we’d have no revenue and therefore no business.
Some business planning purists would say that the starting point of the enterprise is a vision; a goal of where we want to be in two, five, or ten years. That’s fine, but in the everyday battle of making money, those admirable aspirations are forgotten; especially by the staff whose main motivation is the next pay cheque.
In real terms, we’re dealing with the day-to-day interaction between your staff and your revenue source. Remember that most of your staff members don’t share your vision or aspirations. When you look at it like that, what they do and say suddenly becomes important, doesn’t it?
Yet typically we don’t take any time to train our support teams in customer communication skills.
Over the next few articles, we will look at making the sales process easier and more predictable.
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