The Eagle Blog

Happy Customers … but the Right Customers

I read an interesting article in CEO magazine (online) about the power of passion. The sub title was … How your company thinks about customers determines your revenue.

Its an interesting way of looking at things and in many ways it is dead on. If you have a total focus on satisfying the needs of your customers, providing great customer service and ensure that your whole company focus is on making customer’s happy then the article suggests that you will reap the rewards of growth.

Certainly the opposite is true … if you don’t focus on your customers and meeting their needs then your client base is likely to suffer and you will NOT get growth! It is also true that it is possible to get lots of revenue growth, with no profit attached … and who wants that?

One of the lessons that I have learned over the years is that customers are very demanding and as a company we need to find ways to meet their demands … but that has to be balanced with a pragmatic realisation that we also need to make money.

If you have the happiest customers in the World but in order to keep them happy you are spending more than you are making, sooner or later you are in trouble! Your customers won’t remain happy for long if you are going out of business!

That seems to be so basic as to not even be worth stating … but demanding clients, over enthusiastic sales people and “opportunity” can very easily lead to deals that don’t make sense.

A recent situation in our industry (IT staffing) saw a large client demanding that suppliers offer extremely low markups … OK, if the volume is there and you can keep costs in line you can get aggressive with markups, no problem … BUT there were tool fees, tenure discounts, volume discounts and early payment discount layered on top. It didn’t take a mathematician to understand there was no money to be had and all this client will end up with is suppliers who will quickly realise they needed to to working with their OTHER clients! A classic Lose-Lose scenario … I wonder if the experts at AT Kearney were involved!

The mix was perfect … a big client, offering a big spend, a multi step procurement process that saw companies invest in the process and therefore not be eager to walk away, an overly aggressive procurement person pushing people for decisions “on the spot” and economic conditions that mean most suppliers need new business.

The right answer … walk away. This is a client who will never be happy.

So … back to the article. Make sure you have the RIGHT clients, that they are in fact ABLE to be happy … and service the heck out of them. That is a recipe for success.

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