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Feb
04

Taking Your Customers For Granted Can Destroy Your Business

Question! What’s the number one asset in your business? If you really understand business your answer should be your customers. Every business that wants to achieve outstanding long-term success must understand that their customer list is the number one asset they have.

What’s the “life time value” of your customers?

Do you know the “life time value” of your customers? Here’s an important exercise I recommend every business should do. Figure out the “life time value” of your customers, especially your top 20%. If your customers were to do business with you for the next 5 years how much revenue would you generate from them? Do the math and you’ll see why your customers are your number one asset.

How to create “Raving Fans”?

Research indicates that it costs about 6-8 times more to acquire a new customer than it does to retain one. So you should be going beyond the “extra mile” to show gratitude to your customers. According to author Sheldon Bowles, you must strive to create “Raving Fans”.  Your goal should be to provide such great products and services that your customers will become part of your sales force. They will love you so much they will brag to their friends, family and co-workers about you.

You don’t own your customers.

Don’t assume that because you have a customer today, you’ll have them tomorrow. You don’t own your customers. They are doing you a favour by giving you their business. Treat them accordingly, try to discover their wants, needs and desires and educate them on how your products and services can help them operate a better business. Communicate regularly with your customers, at least once a month.

Why do most businesses lose customers?
World famous marketing consultant Dan Kennedy sites in his book (“The Ultimate Marketing Plan”) the following reasons:

1%   die or goes out of business
3%   move away
5%   listen to a friend or relative and switch to another business
9%   leave because they got a better price or product

14% leave due to dissatisfaction with the product or service
This only accounts for 32% of the losses. The vast majority (68%) of your customers will leave you because of what they perceived as “indifference” from your company. Simply put they felt “unappreciated, unimportant and taken for granted”.

Can you afford to lose 68% of your business?

How many of us can afford to lose 68% of our customers? My guess is none. So what are you doing to make your customers feel appreciated and important? What’s your plan to create “raving fans”?  If you don’t have one, it’s time to start taking some action.

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