Never let a customer go

It never makes good logic to let existing customers be disenfranchised!

Business leaders sometimes sadly forget that loyal customers are the heart of every great business. Despite this many strangely focus on winning a short term revenue race through opportunistic pricing and pursue new customers, & often risk ignoring the opportunity to build deeper, more profitable relationships with the customers they already have.

Such a short term strategy is a reckless pursuit for a brief spurt in earnings, but fundamentally it is an ongoing revenue drain that doesn’t last long & fizzles out soon, as one-time customers fail to return & neither are they committed to spread a positive message . A better solution in my experience is to allocate resources equally, between focusing on acquiring new customers to also investing ‘equally’ to engage with existing loyal customers & deepen relationship with them to get their repeat business and also benefit from their word of mouth, by continuously engaging with a loyal base even if it is at a relatively lower relationship price. Firms often forget that the lifetime earnings from existing clients is healthier, larger and more assured. This is why ‘successful and leading service companies like banks, airlines, hospitality, etc’ follow such an approach.?

Being opportunistic never pays

An opportunistic may get temporary higher operational share, but it risks owning a lower ‘mind share’, that is detrimental to lifetime earnings from clients, and ends up hurting in the long run.

A strategic business approach that also focuses on existing clients is a much more assured and certain path to stable growth, ‘business cycle after business cycle’ and leads to predictability of earnings, profitability, greater rewards, and sustainability in positive performance.?

Value creation largely lies in the ‘power of intangibles’

Businesses focused on intangibles turn satisfied customers into enthusiastic advocates - which is more powerful than the millions that corporations spend in mindless self-serving advertising campaigns or less believable social media posts/claims, as it helps in injecting authenticity into social media messaging.

This helps retain profitable customers while pruning those who sap time, money and/or also adversely impact the brand. Totally ignoring client expectations creates continuing gaps that can drive customers away, and smart businesses often know better than doing that.

Companies eventually become strong by being deeply rooted in customer retention & ensuring a personal touch to forge lasting bonds that ensure steady/healthy profits.

This ‘power of intangibles’ is an asset that, unfortunately, accounting standards don’t allow smart CEOs/CFOs to present on their balance sheets….. but business leaders should be aware & should strategically value the true intangible asset of ‘customer repeatability’ which is core for business success predictability & repeatability.

Clearly, it can never make good logic to let existing customers be turned away .....because loyal customers become ambassadors for a business and help ensure repeatability, which is the core to business success and sustainable value creation.