Customers for Life (Will Support your Business)

ProfJorge Entrep

Classic Definition of a Business

When MBA students are asked for this, some are completely lost and will often answer, a for profit entity;   difficulty comes when the organization is non profit.   Is business for profit alone or it does something else.

What comes to my mind is Peter Drucker's classic definition:   "an entity that creates customer" or entity that adds value to the customer. Thus a business model must have a main value proposition;  without it, it has lost its sense of being.  And most of the time, many strama students do not place or neglect to clarify the value proposition of the business.

Thus every MBA, every businessman must make sure it has customer or that it has strong marketing team to sell.  And to be in the mainstream, it must constantly innovate its products and services. (NU 6, NU l2 or NU 52) Customers needs and wants evolve and are constantly influenced by competition. Thus the bar of innovation rises.

Customers for Life

Early in running the business I came across a book by Carl Sewell, a Cadillac dealership in Texas whose businesss grew from $l0 million dollars a year in l968 to $250 million in l998, some 30 years later (25 fold increase can you beat that)  His book now is classic for CRM (customer relations model) and for most car dealership it is a required reading.

He has come up with l0 rules known as ten commandments and some of them are:

l.  Under promise, over deliver;

2.  Treat your customers as if  they are your friends;

3.  There are no Sundays, holidays or after office hours,

4. Systems, not smiles

5.  When the customers ask, the answer is always yes:

Read on for the other 5 commandments

Sewell determined that each customer is almost worth $332t (about 20 sales) in terms of long term value to the company (LTV)  That is why you must keep them for life.

Role of superb customer service in sales

Joe Giscard determined that each customer has about 300 friends and relatives;  he observed this in weddings and funerals.  Thus if you did a lousy after sales service with the customer, he will tell on this to his 300 friends and relatives and it becomes viral.  Imagine a stadiumful hating you and your products.  It is faster now with tweet, SMS, or FB.  A single bad customer service can really wreck havoc on your business.  You can sell more if you keep your customers happy always.