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:
CUSTOMER + ORDER = MONEY
Add the sales element to this equation and we have what I call the "Anatomy of a Business."
SELLING + CUSTOMER + ORDER = MONEY
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.
Bob Reiss is the author of Bootstrapping 101: Tips to Build Your Business with Limited Cash and Free Outside Help, and has been involved in 16 start-ups, is a three-time INC 500 winner and has been the subject of two Harvard case studies, in addition to speaking frequently at university entrepreneurial classes.