The major factor that determines whether an organization is a going concern or not is its customer base. If the customer base keeps growing, the business keeps soaring and the owners have little or nothing to worry about. But the customer base heading south is an indication that the organization is headed for trouble unless the trend is arrested. Having a stagnant customer base means that the organization is stagnant and unless urgent steps are taken to grow the customer base, the business may be on its way to the Golgotha because stagnation of customer base is a prelude to a slide which may sound the death knell for the business.
Growing the customer base is critical to a business outfit because, as noted by management guru Peter Drucker, a business exists to create customers. So, the proof of an organisation’s success is its growing customer base. A stagnant or declining customer base puts a huge question mark on the relevance of the organization to the market where it operates. This is a pointer that something is wrong with the processes or the products of the organization. Unless drastic steps are taken to redress this, the organization may be headed for extinction.
Factors relevant to growing customer base
To keep the customer base on a steady rise, a company has to be conscious of the following factors.
Convenience for customers
More than any other thing, what customers want is convenience. If a product gives great satisfaction but is difficult to access, customers will opt for a less satisfactory product which could be accessed without stress.
In the same vein, if an item gives an extremely satisfactory service but is difficult to manipulate, consumers will go for one with less satisfaction but with a great ease of manipulation.
Amazon.com understands this quite well. With the introduction of the one-click buying, it has made the customer experience a great one because within a couple of hours after clicking on the desired item, it will be delivered to the customer. This has resulted in sales figures soaring over the years.
To record an increase in customer base, an organization must pay attention to the convenience or hardship it creates for its customers.
In the 2016 World Bank Doing Business-Trading Report, Nigeria was placed far below Ghana with respect to the ease of doing business. According to the report, while it takes an importer about 23 days (564 hours) to complete all necessary border and documentary compliance certificates to bring in goods into Nigeria, it takes an exporter only eight days (197 hours) to complete all necessary documents to bring in goods into Ghana. The report adds that this is the reason there is a lull in cargo throughput at Nigeria’s seaports as cargoes are being diverted to neighbouring countries. Because of the inconveniences caused importers, Nigeria loses a fortune in revenue to her neighbours.
Customers always gravitate towards companies and products that are serious about giving convenience to them. Therefore, businesses that want to go far do not joke with customers’ convenience.
Determine which segment of the market you want to play
A company cannot satisfy all the segments of a market. So, it must decide which of the segments of the market it wants to serve. A company must decide whether it wants to be a niche or mass player. It must determine whether it wants to cater to the whole market or it wants to concentrate on just a segment or some segments. Doing this will enable the company to tailor its products to meeting the identified needs of the segment(s), create a niche for itself and be a market leader. Being a market leader speaks of knowing a segment of the market so well that the company can practically read the mind of the market to the extent of knowing what it wants at any point in time. This results in bonding between the product users and the product. Once bonding exists between a product and its consumers, patronage will soar because the product’s patron will not seek any alternative as the customer sees himself as part of the organization and seeks its good always.
It is critical for a business to decide on which segment of the market it wants to focus to make its success easy. In every endeavour focus is important because lack of focus leads to dissipation of resources. Diffused light has limited effect but concentrated light, when passed through a magnifying glass, can burn a paper. When more focused, the light becomes a laser and laser can burn steel and destroy cancer. So, focusing on a segment of the market strengthens an organization and has the ability to make it a focus of the market.
Offer great customer service
Research has shown that it costs five times more to get a new customer than to retain the current one. One way of retaining current customers is through customer service.
Customer service is the process of ensuring customer satisfaction with a product or service. This usually takes place during a transaction, which may be in form of an in-person interaction, a phone call or self-service systems.
If properly handled, customer service can result in an increase of the customer base. But research has shown that poor customer service is the major reason for customers calling it quits with a company and its products.
According to the U.S. Small Business Administration, 68 per cent of customers leave because they are upset with the treatment they’ve received. Harvard Business Review also states that 48 per cent of customers who had a negative experience told 10 or more others. That means, not only did the customers leave the company, they took others with them.
In Understanding Customers, Ruby Newell-Legner, the author, says it takes 12 positive experiences to make up for one unresolved negative experience. A report by McKinsey has it that 70 per cent of buying experiences are based on how the customer feels they are being treated. Another report by RightNow says 89 per cent of consumers began doing business with a competitor following a poor customer experience.
So, customer service is critical to growing the customer base. If customers are not well treated, they seek an alternative which they believe will satisfy their yearnings.
However, so much has been said about customer service. But stripped of the ornaments and getting down to the brass tacks, what really is it? Customer service is treating a customer like royalty. It is giving customers an experience that makes them want to repeat their patronage of a service or product. Customer service as a concept is understood but it is not often practiced by customer service staff because they do not understand the Golden Rule principle. If they did, they would treat others as they would want to be treated were roles to be reversed. What makes customer service staff commit to customer service ideal is their imbibing the Golden Rule principle. An employee in a place is a customer elsewhere; would that employee want to be treated like filth as a customer? So customer service managers should drill this in to their staff to improve their service. If this is really understood, no employee will want to treat a customer shabbily because he knows that he will also be a customer somewhere else.
Be ahead of competition
In the business world, competition is a reality that will never go away because several interests want the same thing. It is only those organizations that are able to think ahead, see through what the market will need before this becomes visible to all and take steps to make same available that will always have an advantage over others. The market always rewards those organizations that beat others to making life more comfortable for the customers with sustained patronage.
In the 1980s, new models of medical scanners were introduced to the market every year by the major players in that sector. That meant hospitals had to keep changing their scanners every year. This cost them millions of dollars but they did not have a choice because they were involved in a business that required precision.
However, General Electric saw this as an opportunity and cashed in on it when it introduced a scanner which only required an upgrade to work with new versions. The import of this is that rather than disposing of the whole scanner, with a fraction of the cost of a scanner, a part could be upgraded and the facility would have access to the latest technology. This gave General Electric an advantage over competition as all users of the device switched to the upgradable scanner. Although other companies later came up with their own version of upgradable scanners, GE had the advantage of pioneering that effort and made a lot of money as a result.
Keep your promise
Every product makes a promise to the customer. As a matter of fact when a customer picks a product, he does not just buy the product, he buys the promise of delivering a value made by the product. One of the reasons that make a customer abandon a product is the failure of the product to keep the promise which the manufacturer has made to the market. To ensure repeat patronage, a product must meet the expectation of the customer. There are no two ways to it.
Last line
Companies that want to go far make growing their customer base the primary focus.
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