Measuring Your Customers
As a business owner or manager of business, have you measured your customers lately? Most of us have, but I would like to discuss what we measure about our customers and why we do it.
According to business expert, Peter Drucker; “The function of any business is to attract and maintain customers”. Without customers we cannot make a profit, we cannot be financially viable and we cannot serve our employees, families and community. Therefore, investing time in measuring the customer is important to any business. Remember, “You can’t manage what you don’t measure.”
Lets start with how many customers do you have. How many are active customers? Is the number of active customers increasing or is it decreasing each month? What is their return rate? With this customer data you can look through your marketing, advertising and networking expenses and know whether they are providing a reasonable return.
How much on average does an active customer spend with you per visit, per year? Are there any distinct groups? Are there groups that shop only the discounts or groups that purchase product or service from you regardless of price? How big are these groups? This customer information helps us predict business volume and manage staff, product/service mix and promotion accordingly. These measurables can be collected without interfacing directly with the customer.
The last but most beneficial customer measurement is loyalty. Loyal customers return regularly for your product or service. Loyal customers spend more per visit, are less price sensitive and less sensitive to minor hiccups. They enjoy the experience that your business provides and they make it a point to let others know. Data on this is harder to collect but it is possible if you learn how to ask. Fred Reichheld in his best selling book, “The Ultimate Question” talks about how to grow profits and revenues by measuring and managing your business to increase customer loyalty. Customers are asked, “How likely is it that you would recommend ABC Company to a friend or family member?” This question measures the customers overall experience dealing with your business and is also a predictor of future behavior. Those highly likely to recommend are your loyal customers. Your focus as an owner or manager is now to listen, learn and improve your business experience to earn more and more loyal customers. Remember, it all starts by measuring your Customers!
For further information please contact:
Bill Griffith firstname.lastname@example.org
Ocie Irons email@example.com
Jeff Johnston firstname.lastname@example.org