Actions Today Affect Tomorrow’s Business
April 17, 2018
A lingering illness for many small businesses and SMEs is the desperate need for cash. Decisions are made today without thinking about tomorrow’s consequences. Although cash is a necessity in keeping a small business or SME operational, many owners do not understand the concept that current actions to acquire cash can adversely affect future operations.
The need for cash cannot override prudent business decisions. If a business takes the attitude that cash is the most important factor above all else when dealing with customers, negative consequences will certainly result. Businesses cannot have a philosophy of make whatever we can today and worry about tomorrow when tomorrow comes. Tomorrow will eventually come and with it will bring lost customers, a negative reputation, and decreased profits.
Small businesses need favorable customer relationships…a major ingredient for long-term success. Thinking today about tomorrow’s satisfied customer sometimes means forfeiting a sale when all factors are not right. Customers purchase benefits and seek solutions to their problems. When a business cannot satisfy one of these two requirements, then ultimately the purchaser is not going to be satisfied. Regardless of the product or service being sold, only satisfied customers return to purchase again. This is the foundation of growing a successful business. Therefore, securing future sales is as important as current sales. It is a combination of returning customers and new customers that builds growth and value for a business.
Once customers become dissatisfied, it is highly unlikely they will ever return. Once lost – lost forever! But, this situation does not tell the entire story. The residual effect is that dissatisfied customers tell others that results in untold damage to a business’ reputation and detrimental to current and future profits.
A shortsighted approach to business acquisition results from:
Promising too much – There is much danger in over promising and under delivering. When businesses promise customers more than they can realistically deliver simply to secure a sale today means disaster looms in the future. It is far better to take the opposite approach - under promise and over deliver.
Lack of customer service – Once a sale is completed, it is amazing how often the sales pitch gets substituted for a lack of customer service. During the “sales pitch phase” everything the customer wants can be accomplished but as soon as the ink is dry or money changes hands, a quick change of philosophy seems to take place. Customers remember promises and are not too quick to forget.
Short on details – No one likes the hassle of reading the fine print on a sales or service agreement but a very necessary endeavor depending on the product or service being sold. While it might be easier for a small business or SME to avoid all the legalese, problems arise when customers think they have agreed on one thing, but the business thinks they agreed on something entirely different. Taking time to specify all the details of a sale reduces the chances of customer dissatisfaction in the future. It is far better to rely on written details than on memory.
These and similar situations can produce immediate cash but create the potential for lost business in the future. Intense competition means that businesses must delivery what is promised including taking care of customers after a sale.
A Business Annuity
Returning customers are an annuity for a business. Sales just keep rolling in, and satisfied customers recommend the business, product, or service to others personally or through social media creating a compound effect on revenue and profit. Long-term success relies on this type of steady growth – customer retention plus the securing of new customers. Gaining customers, losing customers, and gaining new customers creates wasted efforts and money.
Practice the following to eliminate the revolving door of acquiring customers only to lose them in the future:
Deliver what is promised – Customers know what is promised. Quite simply, just deliver as promised and watch customer loyalty develop.
Satisfy customers – Customer service does not begin and end with a sale. It begins before a sale is made and continues after the transaction is completed. Forgotten customers become lost customers.
Pay attention to details – A business can never go wrong when paying attention to details related to customers. This ensures that sales commitments agreed upon between the business and a customer are completed as intended. When the competition forgets about the fine details of a sale, strict attention to detail and follow-up is a springboard to leap past a rival.
Business success is not limited to today’s actions but must encompass thoughts about tomorrow. A proactive technique is to realize that a current sale is an installment sale for the future. A business that takes care of its customers today will find those same customers taking care of the business tomorrow.