Many small business owners joke that they would really love their business if only they didn’t need customers. For better of worse, building a company by focusing on customers is the only path to profitability.
Here are 5 steps every company needs to take to get there:
1. Identify the pain that the company solves for customers. In any economy, customers will always buy painkillers, not vitamins. People buy when they are in pain or have a very great need. For example, most companies can’t do without a phone system for their employees who need talk to customers and prospects. When the phone system doesn’t work properly, this is a pain that affects the sales of the business. Successful companies tie their brand to solving customers’ pain.
2. Identify those customers that have the money to solve the pain. No small business owner runs a company intentionally as a not for profit. If targeted customers do not have money to solve their pain, then the company won’t sell many of their products. Companies need to focus on prospects that actually have the funds to solve their pain and are willing to spend them.
3. Focus on growing current profitable customers. Companies need to keep the customers that make them money and fire others that cost too much to keep. Many times this is in terms of the extra time it takes to satisfy problem customers who always ask for refunds or ask for more than they paid for. Additionally look at the total lifetime value of a customer by looking at other areas besides revenue including the referrals they generate and the buzz they create. Treat current customers to special offers for their loyalty. Too often companies offer special financial incentives to new customers and forget their existing ones.
4. Tie a portion of every employee’s compensation to the company’s Net Promoter Score. This is an industry standard of the company’s level of customer service. It allows each business to identify their detractors and promoters. A higher net promoter score will always lead to an increase in sales because customers will become the company’s biggest marketers.
5. Establish a customer advisory board. Find 6 current customers that would sit on a quarterly meeting to discuss current company products and service issues confidentially. This should be a mix of customers that represent the business’ demographics. Listen to their feedback and report back to them on action plans.
Barry Moltz gets small businesses unstuck. He is a small business motivational speaker, writer, and radio host. Barry can be found at www.barrymoltz.com