Have you ever wondered how some companies can stay in business when they treat customers so poorly?
It’s becoming more common place and every time I experience it I’m shocked.
I’m not talking about front line customer service representatives, I’m talking about owners who should know better. If you treat customers like a commodity you can’t expect to stay in business for long.
Granted, I don’t own a business, but I do lead a church that has lots of business interactions with businesses. We recently went through a building project, which caused us to interact with even more businesses than normal.
All of those interactions reminded me of the sage advice: Never forget the lifetime value of a customer.
One would think every sales person and business owner would know this. You would think it would be on the forefront of their mind as they interact with customers and clients.
It’s short-sighted to just look at what you can make on one job. If things go well you will have more jobs in the future from this same client. Sure that future may be 5 years away but you are going to want that business in 5 years. And don’t forget each customer knows lots of other potential customers.
The goal is to make a customer for life who will make other customers for life.
This goal often gets lost for the solopreneur or small business owner as they juggle so many roles at once, not to mention actually doing the work. It’s easy to focus only on what the profit margin is for this one transaction.
During our entire building process I just couldn’t believe how short-sighted some businesses were. I wondered if they had ever heard of the lifetime value of a customer. It’s like they thought we would only have this one job, which is strange since we will build again in the future.
Some days I wanted to ask one or two vendors if they realized they would answer to God for how they treated His church…but I didn’t.
Even if you don’t believe in God from a purely economical standpoint churches know other churches. Churches also have people who need services for their home or business they own or work in. Those same people know other people. Why would you want to alienate such a large portion of your community?
Referrals are the life-blood of any business.
Churches are often asked if they can refer any one who can _______. Pastors call other pastors about bigger ticket items or services and ask for a recommendation. In those moments one is reminded of the lifetime value of a customer. In those moments a business can win or lose tens of thousands of dollars without even knowing it.
It all comes down to taking the long view instead of just making the immediate sale.
It’s true for big sales and small sales.
For example most churches tend to buy lots of pizza. Pizza for volunteers, pizza for kids, pizza for you and pizza for me. It’s certainly true of our church. Just this week we needed some pizza and a volunteer placed a quick order with a new shop near the church. While the volunteer was waiting the person working the counter asked her what her favorite soda was. Then she was told to grab one out of the cooler…on the house. When the pizza clerk found out the order was going to a church he told the volunteer to grab a few 2 liters…on the house.
Now where you live this may be normal business practice when dealing with a church, but its not in New York.
So think about that for a moment, for $5 worth of soda this pizza shop will gain thousands of dollars in pizza sales over the lifetime of just this one customer (our church). The pizza clerk made such an impression on this volunteer the story made it’s way to me! Then as everyone eats the pizza and asks where it’s from the pizza shop gets more referrals as people try his product and the story gets repeated. If this clerk was just focused on the immediate sale he would have never given away soda. Instead, he took the long view and focused on the lifetime value of a business relationship and at the same time gained other customers.
Maybe just maybe Jesus’ golden rule of treating others the way you would want to be treated applies to businesses too.
It’s never just about one sale or one job it’s about future sales and future jobs. Those future sales and jobs may not even rest with that particular customer but all of the potential customers they know who reach out for a referral. It’s true whether you’re an architect, electrician, landscaper, plumber, HVAC installer, flooring store, lawn sprinkler company, or a pizza shop.
If you own a business or you’re in sales don’t size up a customer based on just the sale in front of you. Think about all of the future sales this client and those they know represent. If you focus on helping the customer get what they need they will help you get what you want.
Take the long view and never forget the lifetime value of a customer.