Treat Them Like Gold

August 31, 2011 by  Filed under: Marketing 

The importance of treating customers like the gold they are cannot be overstated. Attracting new ones today can be extremely challenging. It is an understatement to refer to today’s business conditions as challenging. For most businesses conditions are downright brutal. If demand is growing at all, it is growing very slowly. Buyers are scarce and part with their money very reluctantly. But you don’t need me to tell you more of what you already know.

So, what to do? Thought you’d never ask. The first thing to do is to stick like glue to the customers you have. That shouldn’t even need saying. However, many business owners either forget it when feeling pressure, or act as though they had forgotten it. Don’t be one of them.

You need to take this to the next level. But first lets quickly review the underlying reason, to help you redouble your resolve to take the needed action. It all starts with your cost of acquiring a new customer. Because if you lose one, you need to get a new one to replace the one lost, otherwise your revenue will shrink. And while losing one may not be the end of the world, it may be the beginning of the end of your world, if you ignore it. I am not talking about customer losses that are inevitable, like people moving away, businesses closing etc.

Back to the cost of acquiring a customer. What does it cost you to acquire a new customer? If you don’t already know, you need to find out quickly. If you don’t know you still have to make the same decisions. Remember that even doing nothing is a decision, although it may not have been a conscious decision. But you will be making them without knowing critical facts. So figure it out.

Now that you have determined your cost of acquiring a customer, you should also figure out what a customer is worth to your business. Some people refer to this as the lifetime value of a customer. You need to know this. You can use it to help you make other important decisions.

But back to the cost of acquiring a customer. I bet you were surprised at how much it does cost you to acquire a new customer. So you already have a significant investment in your current customers, in terms of their cost of acquisition. They are assets to your business. In fact, they are the most valuable assets that your business has. Even though they don’t appear directly on your balance sheet.

Would you go away for a weekend, leave your home unattended, and leave the front door open? So anyone passing by was free to enter your home, and take any or all of your possessions? Of course not. Your actions reflect your wish to retain all of your valuable possessions. You lock your doors when you go away. You likely even take additional precautions, in the form of alarm systems to ward off intruders.

Acting in a way that either invites, or allows competitors to attract invaluable customers away from your business is very like leaving the front door to your unattended home open. Now we are getting down to it. You don’t act this way. What is this guy talking about?

You don’t have a ‘Help Yourself To My Customers’ sign in front of your business, but you may have the next best thing. You may have fallen into the trap where familiarity breeds contempt, or at least neglect. What have you done to make your customers feel special? What have you done to show your customers that you appreciate them, and value your relationship with them? Every relationship can deteriorate if it is neglected. Your relationship with your customers is no different.

There is no ‘One Size Fits All’ answer to what specific actions you need to take. The first thing you need to do is realize that you and your business are guilty to a greater or lesser degree, of customer neglect. You may be one of those owners that can benefit from having a discussion about this subject with your employees. They may not be aware of how much it costs to acquire a single new customer. And therefore the investment that goes up in smoke, when a customer fires you and your business because of neglect, or even worse. Because of ill treatment.

Do something overt that will clearly demonstrate to your customers that you value them. You may decide to offer them a new product or service that is clearly of great value to them. This will give you a new reason to interact with them. To show that you are still keenly interested in them.

Being able to demonstrate to prospective buyers that you have a proactive customer communication and retention program in your business, will make it that much more attractive to prospective buyers. One of many steps that you can take. To learn more download a free report at http://www.selling-a-business-without-stress.com/freereport.html with my compliments.

The author, Martin Schultz is a leading authority in preparing a business for sale and the publisher of the free information site http://www.selling-a-business-without-stress.com which provides actionable information about selling a business. His experience includes over 20 years evaluating acquisitions including as one of the founding shareholders of a publicly traded company that grew through acquisition. (After merging with another business of similar size, the merged company now trades on the NYSE.) His other credentials include an MBA from a highly respected North American university, followed by over 30 years of business experience. Martin is now an author and business consultant in corporate finance.

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