Three Important Things to Know About Your Customers
BY: Daniel M. Savage
Shareholders and employees are vital for obvious reasons, but customers are the true lifeblood of your business. It simply can't exist without them, which makes understanding their journey throughout the entire customer lifecycle so important.
Some things are obvious and are borne of common sense. At the end of the day, customers want what they want: faster service, higher quality, and lower price. They also need to feel that you care about them. However, there are less obvious, but particularly important, characteristics to remember.
Here are three for your consideration.
- Not all customers are created equal. Some people find this statement surprising, even discomforting, but it's true. It's not to say, however, that all customers shouldn’t be treated attentively, promptly, fairly, and respectfully, in harmony with established-minimum service standards.
Resources, especially time, are limited; therefore, your best customers with the greatest needs deserve their “fair” share of your attention.
To better understand why all customers are not created equal, take the time to carefully analyze your customer base. Odds are, you'll discover that approximately 80 percent of sales (and profits) are produced by 20 percent of your clients.
- Customer expectations continuously change. Generally, the most successful businesses are those that excel at “delighting” their customers over time. That ability to delight can be a key competitive differentiator – think Apple and Disney. Sounds simple enough, but it's important to remember that today’s sense of delight inevitably becomes tomorrow’s expectation. Remember also that your competitors will eventually adopt your best practices, hence the need to continuously discover new ways to delight.
- Customers can permanently disappear. It's dangerous to assume that your customers will remain loyal “customers for life.” They may go elsewhere for many reasons, such as price, quality, changing needs, or relocation or death; however, studies have shown that nearly 70 percent of customers leave because they feel treated with indifference.
Indifference manifests itself in two basic ways: 1) by giving insufficient time and attention to your clients, and 2) by failing to recognize that customer needs and circumstances are dynamic, rather than static. Both occur due to an absence of curiosity that continuously drives recognition, understanding, and responsiveness to their circumstances.
- Identify your best customers and treat them accordingly.
- Stand out from your competitors by finding new ways to delight your best clients.
Never take your customers or what you believe to be their circumstances for granted. Be intensely curious.
Although additional characteristics are also worthy of your consideration, focusing on these three will greatly enhance retention of your best (i.e., most profitable) customers and promote stronger revenue and profitability growth.
As Jeff Bezos said, "We see our customers as invited guests to a party, and we are the hosts. It is our job every day to make every important aspect of the customer experience a little bit better."