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At face value, the power of one customer seems rather insignificant. After all, one customer making a single transaction certainly will not make the difference between the success and failure of a small business. On the other hand, can one transaction truly make a difference?
The success factor
One transaction with a company, regardless of the monetary size, rarely means success for the business. Of course, it can if the transaction is a once-in-a-lifetime event for a business, which is normally quite out of the ordinary. So, in the everyday course of business, one transaction or sale that stands by itself as an isolated situation will typically not have a profound impact on the annual net profit of the business entity.
When a customer is pleased, however, with the outcome of a business transaction, that same customer will repeat his or her buying experience. Whether the transaction was personal or business, the importance is having the event repeated, not just a second time, but time and time again over a period of years.
Repeat customers and repeat sales are basically a business annuity. Month in and month out, year in and year out, a continuous stream of money flows into the business from the same customers. Little effort and little marketing is required as long as these customers continue to be satisfied.
Fortunately for the business, the positive effect of this repeated purchase cycle does not start and stop with the original purchase. The purchase experience, hopefully, leads to casual word-of-mouth comments, direct referrals, or online testimonials and reviews. Regardless of the action, the end result remains the same: new customers, more sales, continued business annuity, and additional satisfied customers who continue to promote the business without effort or cost to the business.
This is the perfect situation for any business.
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The failure factor
The opposite of success, of course, is failure. The best scenario for a business is when one satisfied customer produces an untold amount of revenue for a business through actual sales and positive comments and referrals. Dissatisfied customers, however, do the exact opposite. They no longer support the business through sales, or bolster the business with positive comments, referrals, or reviews.
A dissatisfied customer just goes away and never brings in more revenue to the business. The business annuity stops, and whatever personal effort or marketing costs that were invested in that one dissatisfied customer is also lost—labor and money out and no new money flowing in. Unfortunately for many businesses, they never know why they lost the customer. They just know they lost a money-paying customer to a competitor.
The actions of a dissatisfied customer, nevertheless, does not end with a competitive business gaining a new customer. In addition to lost revenue from one dissatisfied customer, revenue can very likely be lost from other current customers hearing negative comments or prospective customers hearing negative comments that cause them to seek products or services from another company.
Although bad internet reviews can be a disaster for any business, dissatisfied customers do not have to post negative online reviews to damage the future revenue of a business. The act of not repeating a sales transaction and making casual negative comments to personal and business acquaintances alone can be damaging to any business.
The power of one
So, the power of one customer can be staggering. One customer in and of itself will most likely not be the deciding factor between success and failure of your business, but the compound effect, both in positive or negative terms over a period of months and years, can definitely have a profound effect on the long-term profit and, potentially, the viability of your company.
All businesses should have a mission that every employee understands. The mission does not necessarily have to be in the form of a written mission statement prominently displayed somewhere in the business; however, this would certainly keep employees constantly aware of what your business is trying to accomplish.
Regardless of business size, type, or industry, just think what the following missions could do for any business:
- To become highly successful by pleasing one customer at a time
- To exceed customer expectations by providing the best products and service
- To produce a customer experience that never disappoints
The goal is not to have one transaction with a customer; the goal is to create customers for life. And this is the real power of one customer.
January 5, 2019 at 02:11PM
Forbes – Entrepreneurs