If a competitor came into your market tomorrow and directly challenged your business in a very focused, organized, unyielding, systematic and aggressive way, would your business survive the month? The quarter? The year? Have you created a long term relationship with your customer base? Are your customers truly loyal? Do you know? Do you care? Will your customer flee from you?
Business owners must truly attempt to understand their company’s relationship with customers. The traditional marketing model required businesses to “satisfy customer needs”. However, because of globalization and the flattening of the world, marketers must refocus efforts to create profitable relationships with existing customers while attracting new customers by providing “delightful” customer experiences.
Many businesses view repeat customer interactions as independent events. As competition increases however, business owners must understand the lifetime value of each and every customer. Previous articles have defined customer lifetime value but this concept is worthy of being repeated because of its absolutely critical relationship to business survival. Your employees must be trained to understand that each customer represents a stream of revenues over the lifetime of that relationship.
The internet industry for example back in early 2007 understood that on average, a dial-up customer remained loyal for approximately 18 months before some other company was able to cajole that customer to their service. This meant that at $19.95 per month, the company expected the value of every new customer to be $359. Any adverse actions, service levels, policies, procedures or behaviours which served to cut short that relationship and thus reduce that revenue stream were deemed to be grossly out of line with the company goals of many ISPs. Many of them ensured that all employees understood company revenue expectations and all departments attempted to work in sync to provide a superior customer experience
