5 Reasons Why The Customer is Always King (and always right)

In recent years, I have noticed a trend toward entrepreneurs that only care about money and dismiss their customers completely. They don’t see them as people who need to be catered for and understood but as an easy source of revenue. They are not people, they are just numbers in a database, and that’s an attitude that can (and will) destroy their business.

It’s something that I recently discussed with Ricky Choi when talking about modern operations (read the guide here ?and?watch the video here ).

By shifting the focus to the customer and making sure they are always number 1, you can guarantee the success and longevity of your business. Here’s why:

1. They Will Tell You Everything That You Need to Know

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One of the biggest mistakes that small business owners make is not speaking with customers before they launch their business. They don’t test their products or their services; they don’t ask customers what they want or expect.

Just because you like it, doesn’t mean that they will. Do your research, ask them questions, and make sure you get honest answers.

A customer is your best product tester and your biggest critic.

2. Customer Reviews Can Make or Break You

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Reviews are an essential part of any online business. Good reviews can give you the social proof that you need, showing other customers that you have a strong product/service and that they should invest in you. Bad reviews will turn them away and can destroy your business.

If all you care about is profit, the reviews will be terrible, and your business will suffer.

I’ve seen it happen a lot of times. The negative reviews and comments pile up. The business ignores them, and when the average ratings drop, they try to offset them by paying for positive reviews. But it’s like trying to fix a sinking ship with duct tape because you’re constantly making those fixes and the hole just keeps getting bigger and bigger.

3. Loyal Customers are More Important Than New Ones

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Far too many businesses focus on the short-term and forget about the long-term. It’s all about new customers and new revenue streams and not about maintaining the ones that they have.

For some businesses, new customers really are the lifeblood and loyalty is assumed. Such is the case with Netflix, for instance. Not only do most customers stick around and keep paying their subscriptions, but by focusing more on new subscribers, Netflix can keep its shareholders happy and ensure its stock keeps rising.

But if you’re selling a product, loyalty is paramount.

For instance, let’s imagine that you have a Return on Advertising Spend (ROAS) of 2, which means that every $1 you spend earns $2. With such generous numbers, you’ll want to attract as many new customers as you can.

But that’s based on the assumption that a new customer will buy once and then never again. If you focus on loyalty instead, and that new customer makes another purchase, you’ve potentially just doubled your earnings without increasing your advertising spend. If they return every month for a year, that low acquisition spend could have transformed into a return of 24x.

Do that with the majority of your customers and you’re sitting pretty on an ROAS of 24.

A new customer can come and go. They are the passing trade, the ones who buy on a whim and then completely forget about your company and everything that you do. A loyal customer is someone who keeps feeding cash into the business and is also more likely to become an advocate, someone who will recommend you to friends and family, leave you a good review, and generally help to promote your company.

4. Word-of-Mouth is Still Important

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As noted above, loyal customers are more likely to recommend you, and those recommendations are key to the success of online businesses.

Word-of-mouth has been ignored somewhat in recent years. It’s not quantifiable like Facebook Ads and Google Ads; it’s not something that brands can throw 6-figures at and then monitor. But if you focus on providing a high-quality customer experience and ensuring that all customers are happy, they will start promoting you and you’ll get free advertising.

Some brands were built entirely on word-of-mouth advertising, and the same has been true for many classic films, TV shows, and books.?Fifty Shades of Grey?is a great example. It was a novel that everyone was talking about. Sure, some of those conversations were negative, but people were still curious and so they bought the book, talked about it, and willingly publicized it.

Of course, that doesn’t mean that it’s good for people to trash your brand and your products, as the old adage of “all PR is good PR” no longer exists in a world of cancel culture. But if those conversations are full of praise or curiosity, they will be more effective than any 5-figure social media ad campaign.

In the words of Oscar Wilde,?“There is only one thing in life worse than being talked about, and that is not being talked about”.

5. Your Customers ARE The Business

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Customers aren’t just part of the business; they?are?the business. If you don’t have happy customers, then you won’t have profit and you can’t succeed. Sure, you can stay in the black using aggressive marketing and pricing strategies, but your inattention will eventually catch up with you and your business will fail.

If you want to succeed in business, you need to remember that the customer is always king.