Every business has a finite amount of manpower, energy and resources to spread around, in order to maintain the profitability and growth of their enterprise. How these resources are budgeted, will normally tell you a great deal about how happy their customers are.
For example, as a paying subscriber to many magazines, I continually observe how the publishers discount their subscriptions to new clients as the current clients who make up the core business of the company, are expected to pay normal rates. The difference on a yearly subscription can be 20 to 50 percent less for new subscribers. Is this a good business strategy? It's always disturbing to me, to see these tactics, however I am never shocked by their actions. I just insist that they offer me the same deal for re-subscribing and most companies will be reluctant but accommodating.
Some other examples we are all too familiar with are land phone carriers, cellular service and high speed internet providers. Almost every day in my local newspaper, you can find a half page Comcast advertisement, offering new clients monthly services for $19.95 for a three or six month introductory period. Yet as a loyal customer, my Comcast internet service steadily increases, their customer service steadily gets worse, and it costs me $42.95 per month. This amounts to rewarding new clients at the expense of loyal clients who make up their core profitability. In fact I was so annoyed at their poor service recently that I switched from Comcast to Verizon DSL at one of my properties. Within a week Comcast representatives were calling me on the phone and following up with pretty pink Valentine style cards, asking me to come back. They finally offered me their $19.95 price, but it was too late. They lost me forever.
There are numerous examples to cite, where companies place all their energy on obtaining new business. Their old customers get placed on the back burner to stew slowly in discontent until they resolve to find a new vendor who will treat them kindly. My question for you this week is "Where do you place your energy and resources in your business? Do you work diligently to give your existing customers GREAT service or spend your resources advertising and marketing to obtain new clients?
As a business owner, my philosophy was always to differentiate my products and services and make them so valuable that clients WANTED to do business with me. My BEST customers always received the BEST we had to offer without asking. By having lots of extremely happy clients, I virtually increased my sales force by the number of clients that are happy enough to refer me to their peers. We see this with the BEST of breed in all types of business both small and large.
Let's begin with smaller businesses first. With all the competition in the food business, it's a fact that restaurants with exceptional food and exceptional service are always busy. Price does not play a factor with the BEST. Or let's take a look at the medical business. Exceptional physicians and Dentists have appointments booked up for to 60 to 90 days in advance. Guess why?
On even a smaller scale, let's look at exceptional hair dressers or home cleaning service providers? Some of these tiny businesses can't even take on new clients because they are so busy taking great care of their existing clients. They're not discounting to new clients at the expense of their established customers. They just make their good customers crave for their services because they are exceptional!
On a larger scale, let's look at Apple's I-Pod. They've produced a quality product that individuals WANT TO BUY. There are imitations that are cheaper, however I-Pods will continue to outsell them as long as they keep improving and making customers giddy using them. One last example we will use is the Harry Potter books. There is a cult built around these products. Do you see the manufacturer discounting these books to obtain new business?
In conclusion, I believe that manpower, energy and resources should be allocated to awarding customers with an exceptional experience by purchasing and using your products and services. Anything short is selling your company short. Never, ever punish your established customers, in order to reward your new ones!