Where Do The Big Profits Come From In Your Business?

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Thursday, 7.55pm

Sheffield, U.K.

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. – Sam Walton

It’s hard to appreciate customers.

If you’re like most people, there’s something you’re good at doing – good enough so you’re better than others – and good enough to do it as your job.

It could be anything really.

Glenn Adamson, in his book Fewer Better Things: The Hidden Wisdom Of Objects, talks about how his grandfather designed jet engines and later took up woodworking – and put both skills down proudly on a single business card.

The thing is that we can all get so heads-down in whatever we do that it’s hard to make the time to look around.

And it’s even harder when your environment is designed so you never see a customer.

Increasingly we work in fields where we are separated from customers by technology and distance.

If you’re a programmer, for instance, you’re unlikely to meet a real user of the things you make, unless they happen to be your friends.

In other professions, however, that’s not the case – usually because what you offer is a service and that involves dealing with a customer.

In some situations people are clearly taught that they need to act in a certain way.

There’s a supermarket where some staff members have an angry resting face – where they look unhappy or cross even though they probably aren’t.

Now, if you’re at a checkout, and someone switches off their resting face and replaces it with a forced grin while saying scripted words of goodbye, that’s more creepy than friendly.

Personally, I’d rather they stayed with the normal version of them.

Now all of this is a roundabout way of saying customers matter.

Which you knew, of course. That’s why you’re always trying to get more of them.

Except, those aren’t the ones you should focus on.

The customers that you should be obsessed with are the ones that have already bought from you.

If you haven’t come across The Open Library before it’s an amazing place where you can borrow books for free to read online – and that means finding some books that you just wouldn’t stumble across in print.

So, wandering about, I came across The Upstart guide to owning and managing a mail order business which had the following line.

“The big profits in mail order comes from building up a satisfied customer base that continues to purchase from you year after year. The first time a person buys from you they are only trying you out. The second time they buy is the most important.”

This is the same thing Jay Abraham talks about all the time – You may lose money or only break even on the first sale, but it’s what happens after that that matters – it’s the other sales that are going to make you successful.

Now many people completely miss the implications of that insight – including me.

What it means is that you’ve got to make it easy for someone to make that first purchase.

You can’t talk about how good you are and what you do and why you should be trusted and expect a customer to just believe you.

You’ve got to earn that trust by first doing something small well.

Something that means they can try you out and see what happens without losing lots of money if you fail to deliver.

That first thing is all about getting the customer to place the next order – and that means making sure your marketing is aimed at existing customers as much as it is at new ones.

You need to ask yourself how easy and risk free it is to do the first piece of business with you, whether it’s getting something for free or paying a ridiculously low price for a large bundle of benefits.

And if you do that, do you have a pipeline of products or services that you can then offer once you’ve shown you do a good job and can be trusted?

Because the thing to remember is the value of a customer is not what you make on the first sale but what you make over the lifetime of their relationship with you.

That’s where big profits come from.

Cheers,

Karthik Suresh

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