Customer Loyalty & Your Cashflows ..

No matter what business you're in, you're in the People Business! And you're in the People Business for the simple reason that your cashflow and  financial wellbeing of yourself and your family depend ENTIRELY on just one thing ..

Your Customers!

Jessie Hagen of the U.S. Bank suggests around 82% of business failures are  due to poor cash flow management skills, a lack of  understanding of the factors influencing cash flow, and inaction in seeking help from those who do!"
US Bank Green Paper, Oct: 2004

Rob Holland and Chris Cowdery, "Small Business - Causes of Bankruptcy": 1998, cite Dunn & Bradstreet's observation that "90% of Small Business failures are due to lack of knowledge."

And Brett Chamberlain from "Talking Business" fame, is of the opinion that around 68% of businesses that fail do so simply because of lack of cash-flow which stems directly from poor Customer Nurturing and non-focus on Repeat Sales and Customer Loyalty!
Chamberlain Business Development Corp.: 2004

Neil Stafford - the British Marketing Guru states in a personal communication received in August 2005 - and I quote :
"Increasing the number of times that you sell to the same Customers, and the amount you sell per sale is a critical survival rule if you want to stay in business. If you're focussing on acquiring new Customers at the expense of existing ones then you're focussing on the wrong activities. You're ignoring higher profit margins and lower acquisition costs in favour of lower profit margins and higher costs - and that just doesn't make sense!"

So a prime target of your businesses MUST be to maximise your success potential by developing strong relationships with your Customers. And to develop a sense of loyalty to help bind your Customers to you, in an ongoing win-win relationship.

And let's clearly remember whilst we discuss this - that the majority of businesses DO NOT GET IT RIGHT - as evidenced by the huge business failure statistics!

It's common sense that the greater your sales the better your cashflow. But what is regularly overlooked is that, as a business owner, you have the ability to control the costs of servicing each customer - because you have to "buy" every Customer you serve! Expressed differently - every Customer you serve costs you money. Every NEW Customer costs you the most. Every repeat Customer costs you less. The more often a Customer returns the lower the cost to service that Customer. Doug Malouf suggests that the cost of a sale to an existing Customer can be as low as one twentieth that of making the same sale to a new Customer.

And George Bakrnchev of Grow Business Grow, cites experiences of up to a ten-fold increase in the likelihood of sales when targeting existing Customers!

You would instantly object if a sales person spent twice the time with each customer than was reasonable to expect - yet very few business owners grasp the realisation that they can have a MASSIVE influence over their costs simply by targeting Repeat Sales from Loyal Customers!!!

The Simple and Rational Solution - It's the "Science of Common Sense" in Business!
In other words the development of Customer Loyalty and the ACTIVE targeting of Repeat and Leveraged Sales to returning Customers SHOULD be THE primary target of your business.

You can forget the old adage of “Customer Satisfaction” because any one of your competitors can easily achieve exactly the same thing.

But - on the other hand Customer Loyalty to you is PRICELESS - because once you achieve a sense of Loyalty in your Customers it automatically precludes your competitor's access to those same Customers - and it guarantees an easier and more frequent experience of Repeat Sales - combined with greater cashflow and lower servicing costs - for you!

The generation of Repeat Trade and Customer Loyalty can literally transform the viability of your business! It can also "single-handedly" save you from the most destructive force experienced by small business - poor cashflow!

People who have made a detailed study of Customer Loyalty and its impact on a business (for example, The Harvard Business School, Reichheld, Malouf, and others), suggest that just a 5% increase in Customer Loyalty can increase your profitability from between 25 to 125%!

Expressed differently - Just a 5% increase in Customer Loyalty has the potential to MORE THAN DOUBLE YOUR PROFITABILITY!!!

But even more than this. One of the most powerful aspects of Customer Loyalty is rarely, if ever, discussed. And it's this.

Customer Loyalty gives you a cushion. A soft place to fall. It gives you a "shock-absorber" against the occasional mistake or oversight. It gives you the benefit of "tolerance" in your Customers. And it gives you the opportunity to develop Loyalty back to your Customers!

It gives you a reason for doing business. A reason to be glad to unlock the door each morning. A reason to be happy and enjoy what you're doing.

When you achieve real connection with your customers you experience fulfilment and enrichment far beyond the simple provision of profitability from owning a successful business. You have far better "buy-in" from your employees, and a far more easy and enjoyable working life ...

... It makes both you and your business far nicer places to be around - for both you and your Customers!

Achieving the "Abnormality" of Customer Loyalty - From "Frighteningly Difficult" to "Easy As"!
In the past it was only the very abnormal businesses who achieved the rarefied goal of Customer Loyalty. It was difficult. It was time consuming. And it was very, very expensive. Another of it’s major drawbacks was the time and focus required by the business owner – and this is time and focus most business owners just don't have.

Most businesses try to achieve "loyalty" by trying to be "noticed". In fact most spend the larger part of their income in "advertising", forever trying to achieve just that.

In desperation, plus encouragement from the media, we constantly spend our hard-won dollars "Machine-Gunning" our "look-at-us" messages into space hoping we'll be noticed above the advertising din and the clamour of our competition. Or, you can have an Ad Agency create a "Mini-Movie" which costs $millions - to make people laugh - and hope they remember your Brand ...

But rather than be noticed in "shallowness and vainglory" as suggested by Mark Twain, now you can be noticed by the type and quality of service you provide ...

The world of business is forever changing and evolving. Consumers are now much more sophisticated and demanding as they realise the value of their trade. And the larger the spender a given customer the more likely they are to be more aware - and the much more likely they will be lost to a more aware competitor ...
Forrester Research Newsletter; April 2006

Customers are now looking for a total experience when dealing with businesses - not just the simplistic provision of a service.

So it's rapidly becoming critical that as a business owner you must become aware of issues outside your business. And you must become aware of issues which build quality customer loyalty in your clients.
The Advanced Mobile Services User Paradox - Advanced Users Are Satisfied — But Disloyal; van Veen, de Lussanet, Menke , and Carini; December 14, 2005

In fact the development of Loyalty in your customers is not a luxury. It's essential if you wish to survive! The Business Failure Statistics give a loud and clear warning of this!

"Winners get what they want by helping others get what they want." Barry Bull, Dec. 2005

Thus the creation of "Simply Efficient™". It not only lets you understand your business through the eyes and perceptions of your customers - it also lets you hear the whispers that can revolutionise the future of your business - it actually lets you seek them out!

Now, you can build awareness of the things that are important to your customers - and have direct access to a dynamic tool which lets you enrich your relationships and communication - and to target the most valuable component of every transaction - the way your customer feels!

To generate your Customer's Loyalty - to YOU! Better Cashflows ... A softer place to fall ... And a more successful business!

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