Never Forget Your Customers

Customers are the key to business growth. Meet or exceed their expectations and prosper.

The No. 1 need for business success is a customer. That’s pretty obvious, so why am I telling you this?

It may be obvious but most companies seem to quickly forget this essential fact. Small and startup companies desperately need customers to begin their journey to profits and sustainability. Many large Fortune 1000 companies forget the customers who made them successful.

Just look at all your daily life experiences in dealing with a phone company, an airline, a utility, your cable provider, a government provider, etc. In an effort to develop systems to deal with their size, they become impersonal and forget about the one constituency that propelled their success. In turn, the customers become increasingly frustrated with their treatment and become open to changes in their buying behavior.

You might posit that orders are most important, but, orders do not create more orders. Only satisfied customers do that. Happy customers whose expectations are met or exceeded become your best salespeople and effectively promote your wares by word-of-mouth, at no cost to you. You can’t buy more effective advertising than that.

Satisfied customers are likely to become long-term customers who will look forward to buying your new offerings. It is much easier to increase revenues through existing customers than to find new ones and much less costly. The bonus is that these satisfied customers get you new ones through singing the praises of your company, its products and/or services to their friends, family, and acquaintances.

Unlike other forms of media advertising, there is no cash outlay for this. There is, however, an investment in maintaining the quality, service, need fulfillment, value, timelines and warranty of your offering. If you deliver on these actions, positive word-of-mouth will enable you continued growth and sustainability. Likewise, if you fall short, you’ll have to deal with negative word of mouth, which can rapidly lead to your decline and is difficult and costly to reverse.

Your orders from products or services will eventually yield revenues which can be used for payroll, expenses, taxes, innovation. Most importantly, continued sales leads to profits.

So if we were to simply chart what we’ve said above, it would look like this:

Add the sales element to this equation and we have what I call the “Anatomy of a Business.”

Sales is often demeaned and downplayed by academia, students, ordinary people and even some business people. However, sales is a profession and key to any organization’s success. As we see above, the customer is also a key element because they make purchases, which creates cash flow–the lifeblood of a business. Selling is the process of persuading customers to initiate these orders. It can be a simple quick one-on-one encounter or a complex long-term process. Without sales, you will not get orders.

These basic principles are easy to forget but it would benefit all entrepreneurs to remember the anatomy of a business in their hectic schedules. Of course, it gets more complicated when competition is added to the mix. When you add in dealing with other issues like having the right resources to accomplish your goals and creating a culture of integrity and innovation, remembering customer satisfaction can fall by the way-side.

So, amid all the chaos, problems, uncertainties, new opportunities and setbacks, don’t forget for a moment how all your decisions and actions affect your customers. Neglect them and be prepared to pay a high price. Satisfy them and prosper.

This article first appeared on



Lesson for Small Business

The President has proposed an up to $5,000 tax credit for Small Businesses for each employee they ADD in 2010, and an additional tax break for salary increases given to employees making under $100,000 a year. The purpose of this is obviously to add badly needed new jobs.

To receive the maximum $5,000 credit, you would have to hire someone for at least $80,645. An employee you hired for $50,000 would earn you a credit of $3,100. It’s a sliding scale.

I do not believe many new jobs would be created through the program although the attempt will incur a significant cost.

Here’s why I don’t think this well-intentioned plan will work and, in fact, will produce negative results. If you are one of the many Small Businesses who are struggling in this economy or are doing well by maintaining your business, why would you spend $50,000 on a new hire to receive a $3,100 credit? It makes no sense. Small Business entrepreneurs are smart and practical, particularly with money. They have no bailout net. They will hire when they need to and not before. This proposal will adversely affect their cash flow.

There is another group of businesses that are doing well right now and are looking to hire to handle their growth. They will hire with or without government credit. It is a waste of taxpayer money to give them this gift, as it will not alter their behavior.

Both groups are reluctant to hire or borrow money until they know the new rules of the game. How much will their taxes be increased? What will their new healthcare costs be? What will new local taxes be, considering that most states and municipalities are in financial straits? Who will be governing, and will they rein in spending? Is inflation around the corner? Etc. These smart entrepreneurs will not spend expansion money on new hires until they know the answer to these and other questions. They know there is no urgency to hire now, as there will still be highly qualified people available tomorrow. 

There is another cost associated with this proposal that has gotten little press coverage. What will the administrative costs be to implement this plan? It must be monitored, or there will be lots of gaming in the system. I would imagine that the new bureaucracy created will be very costly, but the good news is it will unfortunately create new governmental jobs.

There are a lot more companies eligible for these credits than one would think. Small Businesses are not only home based solo workers or small local retail stores. According to the SBA (Small Business Association, a government agency), Small Business is defined in terms of number of employees or average annual receipts.

Companies with 500-1500 employees or $7,000,000 to $35.5 million dollars in receipts fall into the definition of Small Business and are thus eligible for these tax credits. These large Small Businesses who are doing well will be hiring a lot of employees because they need them and not due to the tax credit. However, the government will be giving them money for jobs that would have been created anyway and thus adding unnecessarily to the plan’s cost. (for more info about Small Businesses definitions at

There is a lesson in here for Small Business owners. I liken the Small Businesses in this situation to the customers of the government. The government created a plan without a clue as to the mindset and needs of their customers. I cannot imagine that the decision makers in government who created this tax credit plan TALKED to Small Business CEO’s. If they did, they would have discovered their plan would not work.

So, Small Business owners as you grow and your business gets more complex and time-consuming, do not lose sight of your customers and their changing needs.

7 Ways to Get Great Referrals

The most effective advertising a company can get is more difficult to achieve but much more effective and lasting than traditional media advertising. It is word of mouth advertising and it’s earned rather than purchased. It is your customers’ opinion of your product, which can fluctuate from very vocal with praise to very vocal with derision.

Word of mouth is available to start-ups as well as large corporations. It can be achieved with minimal cash outlays by just doing things right. Word of mouth can be earned quickly or over a long period of time, depending on the product or service you are selling, and sometimes it’s instantaneous. After people view a new movie, they talk about what they’ve just seen. It could be “What a great picture” or “That was a stiff.” Descriptive word spreads quickly, and new viewers of that movie result if those who saw and liked it tell their friends.

On the other hand, word of mouth can take a long time to develop for some products; you’ll probably put a few thousand miles on a car before recommending it to others, or that new diet might not budge your scale for several weeks before finally proving all the work was worth it.

Here are seven factors to consider for creating good word of mouth for your company and its products:

  1. Quality: From your first day of business, all company employees must be aware of the importance of maintaining quality, and systems must be put in place to monitor it. Any products or components outsourced must be rigorously inspected to see that your standards are met.
  2. Service: Regardless of whether your product is a high or low service one, customers’ problems must be addressed and solved with a minimum of effort on the customer’s part and in a timely fashion.
  3. Instructions: Many products need to be assembled or explained. The instructions accompanying the product must be clear and concise. Many companies fail miserably in this area and devote little time and effort to it. Poor instructions can turn off consumers to all your future products and create bad word of mouth. Even if your product doesn’t require assembly, customers will appreciate a thorough explanation of its uses and functions.
  4. Communications: All contact with your customers and their inquiries must be courteous and knowledgeable. This starts with the telephone. Have a human answer your phones, not a computer like most large companies do. This simple move will start you on the path to good word of mouth with your customers.Your receptionist, who I call “The Director of First Impressions,” is a more important hire than most employers acknowledge. You want an upbeat, intelligent, pleasant person in that slot.

    Don’t forget that managers’ interactions with employees, suppliers and stakeholders affects the word of mouth of your product and brand, also.

  5. Value: The value of the products you deliver to your customers is paramount if you want them to return and spread the good word about you. The value must meet or exceed their expectations. A good maxim to make sure all employees understand is under promise and over deliver.
  6. High integrity: You want all your stakeholders and customers to trust you. This trust must be earned continuously. It takes time to develop, but can be lost in an instant. Customer and client complaints must be addressed and solved quickly. Problems cannot be ducked, delayed, or shifted. Mistakes should be admitted and corrected. People want to do business with and work for trustworthy companies.
  7. Be a good citizen: There is no doubt that a company’s prime responsibility is to make money. So do not be embarrassed to earn a profit. However, I believe the company has a responsibility to take actions to enhance the quality of life of its community and employees. This good citizen appellation should not be just empty promises for show. If your intentions are pure, it is also good for your business, your family, and your sleep.

This article first appeared on

Small Business Tip: Humans Should Answer Your Phone

As large companies get bigger and depersonalize themselves to save labor costs, they expose their vulnerability to Small Businesses. However, many Small Businesses miss opportunities to capitalize on this Small vs. Big Business competition by trying too hard to emulate their larger foes. They should be trying to differentiate themselves from Big Biz practices that cause their customers to scream in dismay at times. For today, let’s hone in on phone calls.

A large number of big companies put you through an obstacle course to get an answer to your question. First you are told to push one of two buttons, to select the language you want to converse in with a machine that refuses to even chuckle at your best lines. Then you are directed to pick one of four choices, then one of five, then one of three, etc. Sometimes none of their choices fit, so you push 0 and hope you hit the lottery and get an operator from another country. If you are so lucky, you then ask questions like I would like to know the name of your Marketing Director, the head of Small Business, etc. You might be told that they don’t know or most likely we can’t tell you. This answer would also be applicable if you were to ask for an email address.

There are many points in your odyssey, particularly when you first dial and the computer voice tells you to hold, but they appreciate your call and that this phone call may be monitored to ensure better service (a lie). As you hold and listen to music you did not select, a computer will periodically interrupt and tell you they have a heavy volume of calls that day and someone will be with you shortly. The latest in technology in this scenario is that the company won’t let you hold indefinitely. No, they don’t ask for your number so they can call you back. They automatically cut you off with a recording saying “Good bye” or “You have been kicked from this conference.” This actually happened to me recently with one of our major phone companies.

So, please Small Businesses of America, have a real human person with a pleasant demeanor and some brain power answer your phones. This Director of First Impressions will pay off in a big way. I have no quarrel with using technology, but it should help, not hurt you. If the person calling your company is told by your Director of First Impressions that they are not in, they could offer the caller a choice of leaving a message with the operator or being connected to the  person they are calling’s voice mail.

Personalize your relationships, and you will be on the way to acquiring and keeping loyal customers.

Would love to hear any Big Company phone stories of import that you have experienced.

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