... COVER CONTINUED
“SMART COMPANIES KNOW THIS ONE METRIC CAN MAKE OR BREAK THEIR WHOLE BUSINESS.”
4. RETAIN CUSTOMERS.
I’m a huge believer that the masses are always wrong. I realized early on in my entrepreneurial life that focusing all my efforts on new customers was a horrible idea because I was struggling to get them at my dry-cleaning company. I dug into all the data one weekend after spending a month knocking on doors and signing up new customers, only to bring in virtually the same amount of revenue at the end of the month as I did at the start of the month. I quickly realized that if 30 more people had used my service that month, we would have seen good growth and more profits. Since I had to go out and knock on doors to get each customer, I made it my mission to figure out how to keep as many of those customers as possible. Ultimately, I figured out how to increase retention, and over the next few years, I stumbled on the other growth levers. Growth doesn’t have to be complicated, but if you want to achieve massive success and make millions in sales, you’re way less likely to get there by doing what everyone else does. –Shaun
If you were to score your effectiveness in each area with a zero-, one-, or two-point score, with zero meaning you do just the basics, little, or even nothing in the area; one meaning you do okay in the area but could use some help; and two meaning you crush that area, how would you rate? That isn’t a rhetorical question. Seriously, for the good of your business, pause for a second, reexamine the four areas, and give yourself a score. It’s okay; I’ll be here when you’re done. Now that you know the four ways to grow a business and have scored yourself in each area in terms of effectiveness, you’ve got the start of a mini road map to growing your business. In terms of putting these systems in place, retention is the easiest problem to solve, followed by elevating customers, encouraging repeat buyers, and, finally, the most difficult: acquiring new customers. How do you feel you did? Did you score zero points in any of the categories?
I talk about this all the time, but if you work hard to get a new customer, spend the time to give them a good customer experience, and elevate them into higher levels of service, why would you then forget to implement campaigns to retain them? Retention is the key to long-term success. Getting new customers is too hard and too expensive for 99% of businesses to not care about retaining a customer once they’re in the doors. In fact, retention is often the difference between single-digit growth and triple-digit growth. Of course, sometimes a company is so hot that they don’t have to focus on retention and customer experience, but that success is always short-lived.
Smart companies know this one metric can make or break their whole business.
Small companies think that business is all about acquiring new customers, and, because of that, they always stay small.
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