The Easiest, Most Cost-Effective Way to New Profits
Time has a nasty way of turning even your best assets into liabilities, and similarly, even your happiest customers have a way of taking yesterday’s “miracles” for granted. No matter how good you are, customers are always looking for the next new thing.
If you’re able to respond to your customers’ ever-expanding requirements and demands, you have a good chance of holding your own. But that’s about it—you can forget about growth. To grow, you need to anticipate new consumer demands and you need a plan and a program to consistently get out ahead of them.
That means you need to actively and consistently listen to your customers. Unfortunately, even when we try to listen, we often miss important messages. We tend to listen primarily for what we want to hear – not what we need to hear.
Doctors– some of the worst listeners in the world—provide a good example. One of my earliest businesses was Original Research II, which measured customer satisfaction across many different industries. We were asked by a large group of doctors to determine which considerations were most important to their patients and prospective patients. We also asked all of the doctors in the practice which factors they thought were most important to patients. The mismatch was fascinating and frightening.
Patients’ Actual Priorities Doctors’ Presumed Drivers
Office hours Board certifications
Free and convenient parking Technical skills
Insurance coverage Referrals – word of mouth
A great receptionist Insurance coverage
For the doctors, these results were the rudest of awkenings. It was absolutely clear that a concerned and considerate staff was way more important than the most highly-trained surgeon on the team.
We did a similar project for bank officers. It turned out that for customers, inattention was the worst possible sin. They could live with almost anything else, but when they believed that no one was paying attention to them, they stopped caring too, and left.
The bank officers, on the other hand, were largely consumed by considerations such as price, interest rates, errors, and credit decisions. They paid only scant attention to fundamental emotional considerations, or to their customers’ desire to be appreciated and wanted.
Failing to connect, cultivate and extend your relationships with your existing customers means that you are forfeiting the opportunity to harvest the easiest and most cost-effective additional profits available to any business. Getting new customers is fine, but deepening your involvement with your current customers, increasing their average spend, and locking them in for life, is the brass ring.
HOWARD TULLMAN | Columnist
Howard Tullman is the CEO of 1871 in Chicago where, at the moment, 260 digital startups are building their businesses every day. He is also the general managing partner of G2T3V, LLC and Chicago High Tech Investors – both early-stage venture funds; a member of Mayor Emanuel’s ChicagoNEXT Innovation Council; and Governor Quinn’s Illinois Innovation Council. He is an adviser to many technology businesses and an adjunct professor at the Kellogg Graduate School of Management. @tullman