Listen to the audio version of today’s tidbit. I recorded this from a beautiful northern Ontario lake. The first 30 seconds of audio is a bit muffled, but it’s better after that.
I’m writing this from a plane flying high at 36,000 feet on my way to visit a client this morning. One of the ways we helped this client tremendously was by moving tens of millions in sales revenue out of the little black books of two dozen sales reps and into a living, breathing, customer database, for the first time in its long history.
Sounds simple, right?
Yesterday, I asked the company’s CEO if I could talk about this publicly and his response made me chuckle, “You’ve been talking about it for years, Noah. I just finally realized I better do something about it. I’m practically your poster child.”
Our relationship started on a previous visit months ago. The then-prospective client asked me to visit their facility to discuss how I might be able to help them increase revenues.
He proudly showed me around and told me about the history of the business. He had good reason to be proud–it’s a very impressive business, and he obviously managed it well, especially from the operations side. We were talking because he was concerned about the performance of his sales team–every year they’d been telling him that the modern competitive environment was getting tougher, that it was harder for them to stay competitive, and he wasn’t sure how much stock to put into that prognosis.
To start, I asked him a straightforward question (you may notice this is a favorite tactic of mine).
The question was this: What’s the most valuable asset you have in this business right now? I don’t mean this in a hippy dippy way, but as an actual, concrete question. If you had to go out of business tomorrow, what would a smart buyer pay the most for?
When the question is put like this, a lot of the froo froo answers go out the window. “Our people are our most valuable asset” is drivel from HR that is, of course, the wrong answer to this question. Your people will scatter to the wind on the day the doors close, and while they’re still open–nobody is irreplaceable.
Is it your inventory? You’ve got millions of dollars of products that won’t do you any good after the doors shut tomorrow. This is a better answer, but it’s still dead wrong.
What about your patents? Trade secrets? Capital assets? Brand equity? For most companies out there, the answer is no, no, no, and “are you serious? NO!”
With very few exceptions, there is no asset more valuable than your customer list, and specifically their purchase history & contact info.
As the great Peter Drucker said, “Without a customer, there is no business.”
You all know that one of my core beliefs and teachings is that your customer is the single most valuable resource that must be developed, nurtured, and cultivated. I’m not saying your people aren’t important, of course not. But we often spend more time nurturing, training and developing the talent than we cultivating the customers that make having people possible.
Here’s the thing–you can’t do that if you don’t know who your customers are, or how to get in touch with them. And if you don’t know what they’ve purchased from you, or what you’ve talked to them specifically about regarding their needs, then it’s going to be hard to say anything when you do get in touch other than “please buy from us!”
It always shocks me when a company doing north of $50M in revenue doesn’t have the right systems in place to market to their customers, or to know what they purchased recently, or the last time they were spoken to, and how to get in touch. This is aside from the fact that disgruntled sales folks can effectively hold the keys to tens of millions in revenue.
When this information is a corporate asset, you can figure out what people like to buy from you. You can understand what individuals buy from you. You can figure out what you can then market to those individuals (we’ve all heard of the “market of 1”, and that’s precisely where we all need to get!)
You can figure out other product/services you can offer or partner to offer to your customers. (Remember the Evergreen Forest from a few weeks back?)
You can be alerted when their purchase frequency drops (to reach out to keep them before it’s too late).
Without it, you’re stuck with hoping that people keep walking into your company to throw their cash at you.
For the WalMarts and McDonalds and Tesla’s of the world, that approach works great. But when you’ve got competition, when you’re not far and away the market leader in your space, and when you don’t have a billion dollar advertising budget to keep the new clients coming, you can’t afford to ignore your list.
Ever. It’s the most valuable thing you’ve got.
Once my client and I had this conversation, he realized pretty quickly that he didn’t have that information easily at hand, and so couldn’t have efforts in place to take advantage of it. Our work started shortly after that.
Your Challenge For This Week:
Spend time with sales and marketing and do a thorough review of your customer database.
Is it current? Is it up to date?
Do you have credible info on customers such as the last time they were spoken to and the next point of contact for every customer?
Is your customer database and prospect list growing? Are you making an attempt to capture info from every prospect?
Are your contacts current and up to date?
Most importantly–how are you actually using this information? Are you using it as well as you could be?
Have a great week!
P.S. There’s a new episode of my new podcast The Evergreen Show available HERE.