As an entrepreneur the objective is to build a successful, stable business. So, how do you know if you are on the right path? Progress often gets measured through ‘transactions’ – completing a certain number of transactions in a given time period. How many ‘jobs’ you complete in a week, how many orders you secure in a month or how many pizza’s you deliver in an evening. Although there are many valid reasons to measure transactions, I would suggest that the secret to long-term success and stability is more closely related to ‘relationships’ and less about ‘transactions’.
Think about it for a moment. Where do you prefer to get your coffee in the morning? Do you prefer a coffee shop that recognizes you when you walk in the door – or – a shop where you take a number and stand in line? Most people prefer a place where everyone knows their name. (Homage to Cheers)
Referrals are also relationship and trust driven. When you make a referral do you say, ‘Give Joe a call. He owns ABC Co. and you can trust him.’ Or do you say ‘You should give ABC Co. a call, they do a lot of transactions.’ Which referral are you more likely to make? Which is more powerful?
So, how do you focus your business on ‘relationships’? Here are a few ideas:
- Measure the number of referrals you get each month.
- Track how many of your old customers you touch each month.
- Compensate on retention, not just sales
- Hire a firm to measure how your customers feel about you
- Measure speed of response/resolution when an existing customer has a complaint.
This is obviously a starting list. The most important part is to change your philosophy. Keep asking, ‘What can we do add value to our existing customers?’
Remember, your best customer is the one who already knows you. A ‘transactional focus’ gets people in the door but a ‘relational focus’ keeps people coming back and, over time, they bring their friends!! The best companies are always asking, what can I do to better support my existing customers and build lasting relationships?