Question: What would drive you away from a business?
A concern that every business owner or manager should be paying attention to is what drives customers away. As much as attracting customers is important, if other customers are leaving, it’s important to understand why. The best way to understand motivation for customers to leave is to think about what would make you, or someone you know, stop using a particular place of business.
What would make you leave a business?
In last week’s question, I was interested to know what factors you use in business to measure progress, or your ability to reach goals.
In a recent course on writing business plans, I learned that while many businesses use income as a measure of progress, it’s actually counter-productive to do so. For example, a business which wants to earn $120,000 a year needs to bring in $10,000 per month. Perhaps that’s not such a big deal, but if after 6 months it’s realized that the average has been only $5,000 per month, it can be de-motivating.
Perhaps this is why the focus in business plans is driven toward number of customers, or leads, rather than dollars. I might know that a customer is worth about $5,000 in income, and that to reach my goal of $120,000 I need to find 2 customers per month. If, however, after 6 months I realize that I’ve missed my goal by 50%, that’s an extra 6 customers to find in the second half of the year.
As well, since many businesses operate on a recurring basis, that is, where customers come back over time to continue to support the business, the importance of any given month is limited, since there is the secondary influx of consumers that will happen over time. While missing the monthly goals continually will hamper a business’ ability to flourish, people are still aware that minor bumps in the road can still be navigated successfully.
Other ways to measure goals can involve number of positive reviews from clients, the number of referrals acquired and turned into clients, the number of networking events attended at which at least one new contact was made. The goals, though, should be directed at the long-term success of the business, and not the monthly quota – that is, they should be used to benchmark those events which bring your business closer to its eventual success. When you fall short of those goals, it is easier to pick yourself up and move forward, since falling short does not negatively impact your business, but rather, fails to have a positive impact.