Episode 7 – 6th Key Factor – The Right Customers
Customers can make or break your business. This opening statement may sound trite, but is the truth.
We are now entering a new business paradigm where the focus must always be this question “What is in it for our business?” Focusing principally on customer needs to the exclusion of your business’s welfare, means the customer gains preferential treatment in the discussion on how you operate your business. Don’t forget, without cash and profits, plus customers, the business does not survive.
In the past, many business people focused on what their customer wanted, only to find out, the customer still did not buy. Furthermore, even if the customer did buy, they often did not pay within terms, despite signing agreements to do so, refused to pay at all, wanted another discount, were uncooperative, or expected you to fund their businesses.
From now on, finding and keeping the right customer is everybody’s responsibility within the business, NO EXCEPTIONS. In the new business world it is this emphasis which will be a major factor in survival.
Identifying the right type of customer means you will focus on; making a profit, or at least breaking-even, or identifying whether there are any other real benefits. No longer will the wishy-washy feel good statements from management and sales be acceptable. If you cannot quantify the cost-benefits in dollar or business terms for keeping an unprofitable customer, then you continue to risk going out of business.
To identify the right type of customer, you also need to understand the words used with your customers. These three examples will give you an idea on the importance of words.
Potential – suggests you should run for the hills and tell the customer to go elsewhere. Too often this word has led to the destruction of value to the supplier. In the coming months and years, potentially more businesses will go out of business than at any other time since the 1930s great depression.
In truth however, it is probably worth completing an honest due diligence review of the customer’s proposal, if they have been a good customer in the past. The emphasis is however on the words “honest due diligence review”.
No, is one the most under rated words for successful selling. If the customer walks away without asking why, or with a snide comment like “… well I will just buy from your competitor”, in my view that is perfect. Your business has probably just saved a lot of money.
“We will pay you when they pay us!” is usually used by the customer after the goods or service has been supplied and is rarely stated upfront. If you think about these words, essentiality the customer is saying they reserve the right to “…never pay you.” Dealing with these customers is another sure-fire way of going out of business.
Finding and keeping the right type of customer will not be easy in the future. It will also be a lot of hard work. If you get it right however, you stand a chance of winning the long-term game and surviving the recession.
This concludes the sixth key factor; the right customer. After a short break we will review the next key factor, technology and cyber protection.