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I was out of the office last week attending the funeral of my grandmother.  In her mid-eighties, this woman had survived the Great Depression, raised 5 children and lived long enough to dote on and enjoy 13 great-grandchildren.  Over the years, she hosted countless parties and holiday gatherings for huge numbers of people.  Her door was always open, and there was never a better hostess.  However, what many of us remember most about my grandmother are Sunday dinners, where it was “just us.”

Even during these simple Sunday meals, Grandma insisted on setting the table with the “good” dishes.  When her kids or grandkids would ask why or complain about having to do the prep and clean-up that went with that task, she always had the same answer: “We do this because your family is the most important company you will ever have.” Read the rest of this entry »

The One-Two Punch of Customer Relationships

Are your current business relationships strong enough to survive this new economic environment? Will a competitor be able to get some business by offering an incentive or discount? Do your marketing and sales people understand how to cultivate relationships to prevent this? This is an ideal time to analyze relationships to see how “competitive proof ” they really are.

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Day after day, B2B product manufacturing companies discuss the best way to increase their top line sales and improve their brand penetration. Often the discussion ends around the product improvement, a new business blitz, or on how they can move into new market segments to attract new customers. As the old proverb goes: the first place to look is at your current birds or customers.

Let’s look at increasing customer equity as a tool to enhance sales. In plain terms, customer equity is the sum of the lifetime value of the customer. An existing customer is much more valuable than a new customer; in fact, it costs four to seven times more to replace a current customer than to keep one. It is also very typical that a customer that is exceedingly satisfied with your product and their customer experience will promote you and your brand to his peers and contemporaries tenfold. Yes, a Bird in the hand is worth 2 in the Bush.

Okay, so your loyal customers are more valuable, they favor your company and product, they will pay a premium, they are much less receptive to competitive advances, and they often forgive your mistakes more quickly. So why do we spend so much of the budget on customer acquisition and practically nothing on retention? There certainly must be some way to enhance customer equity. Tune in later; we will talk about that another time.

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