Your greatest asset is your relationship with your customers. If you erode it, you’ll play a Sisyphean game of trying to gain sales from new buyers faster than your customers leave you.
The Purpose of Business
If we want to know what a business is we have to start with its purpose. And its purpose must lie outside of the business itself. In fact, it must be in society since a business enterprise is an organ of society. There is only one valid definition of business purpose: to create a customer….It is the customer who determines what a business is….The customer is the foundation of a business and keeps it in existence….Because it is its purpose to create a customer, any business enterprise has two—and only these two—basic functions: marketing and innovation.
Peter Drucker, The Practice of Management
The relationship you have with your customers is central to the purpose of your business.
Your business must find a potential need that exists within the society it operates and it must create the desire to fill that need in people. Before the business creates the need, it only exists as a potentiality.
You create a customer by marketing a need to them—turning a potentiality into an actuality—and then fulfill the need through innovating a product.
Needs, as Maslow observed, cannot be entirely fulfilled. Fulfilling them is a continuous process and not an end. This lack of fulfillment creates a situation where the customer comes back to you over and over again to seek further fulfillment. Consistently fulfilling a need is what creates a long-term relationship.
The Foundation of The Relationship
Through marketing, you create an expectation and through the product you fulfill—or hopefully exceed—the expectation. Through marketing, you create the potential for trust and through the product you actualize the trust.
The more often you create this cycle, the stronger the bond between the company and the customer becomes. But, it also becomes more dangerous to break it: the closer the relationship, the more the customer trusts you and the more breaking it will hurt.
This isn’t something to run from, but rather embrace. Trust is the key to all successful, healthy relationships.
Accelerating Relationship Erosion
Customers are continuing to place more and more value on the relationships they have with businesses.
Customers want you to show that you care enough about them that the products you sell live up to high standards and that your level of service reflects how much you care about them as individuals: things anyone would want out of any relationship.
But, for many companies the gap is widening between acquisition and retention: companies are acquiring customers at faster rates but they’re keeping less of them.
This stems from a lack of understanding what customers truly want from the business in the long-term. This erosion is a failure to understand your true purpose.
If the gap continues to widen, eventually there won’t be any customers left that an organization has the potential to satisfy..
How well do you understand your business’s purpose? How strong is your company’s relationship with its customers? How likely are they to leave you for someone else?