No one ever starts a business not to make money. Every one hopes that their business will start off well, and will continue to do well. Most successful businessmen and women get there by tried and tested ways of working hard and long hours. None of businesses survived without acquiring new customers. None of the businesses became better than their competitors without converting a customer a willing and happy customer.
I have known many very successful business owners in my time. Whenever I asked them what put them apart from the rest, they almost mentioned 3 essential skills: manage your time well, learn to find good staff and keep it, and retention EVERY customer.
The last thing seems simplistic and obvious but is least practised by majority of businesses. Almost every successful business has had to overcome competition. Every one has to acquire more customers than every one else, and to acquire them from their fiercest competitors to become better.
Business owners who take necessary care to understand their customer and his psychology are almost always well placed to win more customers than every one else. A recent study done by a market research firm ‘discovered’ what every human being has always known for centuries: people like to have more for less. For example, if we had a choice between getting one widget or two widgets for the same amount of money, most will chose to have two. It is not greed; it is just human psychology that cannot be changed.
Business owners who understand this basic human nature find it easy to get more customers through their door than their competitors. Isn’t there the thinking behind ‘buy one get one free’ or ‘10% off today’ types of product promotions?
But smart business owners do not do what every one is does. They do it differently and they do it better. For example my own barber, John, who is very successful in his own right, and who I have known for years has adopted a novel way to acquire new customers. During lean times (e.g. periods when his business is quite) he asks his existing customers for introductions to friends in exchange for a gift that they cannot refuse. If existing customers are already happy with his service, they will have very little objection in referring their friends to him. When he is quite, john picks up the phone and offers a large discount just for trying out the service. Once they are in, they get another discount and an incentive if they come back next time. This is followed up with a reminder phone call.
So what is his success rate of acquiring new customers? It is phenomenally high. He almost never quiet and he does exceptionally better than his nearest competitor. He does not pay for any advertising and his promotions cost him just a bit less money for his time (which is the discount he offers). His customer acquisition costs are very little and customer retention ration is very high.
What does he offer his existing customers? He offers a gift that is perceived very highly by most of his customers but which hardly costs him any thing at all. His competitors wonder: how does he do it?
He is just creative… more than every one else. Creativeness is what differentiates most successful businesses from rest of the pack.
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