Small Business Blog from Atlantic Canada

I am "CA" Atreya (PMP, MBA), the author of this blog. I help businesses in Atlantic Canada achieve their BHAG successfully. You may subscribe to this blog using a feed reader (RSS).

In the government offices of India there are pictures of Mahatma Gandhi hanging from the walls. And beneath them, usually, the following statements appear:

“The customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an outsider on our business. He is a part of it. We are not doing a favor by serving him. He is doing us a favor by giving us an opportunity to do so.“

If my memory serves me right, he coined these statements while in South Africa - and that was over 60 to 70 years ago. It is surprising that Gandhi was able to grasp this concept way back when.A quick Google search on customer relationship management yields a innumerable sites that extol the virtues of keeping the customer happy. One website says “… many are realizing that there is also a “C” in CRM, or “customer” in customer relationship management …”. Another website says “… companies have a policy that puts the customer first … ” and so on and so forth.

I agree to all these statements - to an extent. To all such statements, I would add a condition - if they are profitable for my operations. For each customer that you serve, ask yourself this: “Is this customer profitable for my business?”.

Now before you are tempted to ask “Hey, isn’t that common sense? We know that we are not a business of charity. Why would I service a client who is not profitable?” I thought it was common sense too - until I ran into an organization where the CEO bent over backwards to service a customer not knowing how much the company is making. And when I checked to see if the customer was profitable or no, there was no such data. The organization I am referring to was a small and medium enterprise (SME).

A small and medium size business lacks resources - people, finance, infrastructure - you name it. The CEO of an SME has to ensure a high ROI for every dollar spent. That means for ever dollar I spend on the customer, for every minute an employee spends on a customer, the CEO has to ensure that the income is greater than costs (both direct and indirect).

Some lessons that I have learnt:

1. 1. When working with constraints that have direct financial impact, planning plays a key role. Secondly, sticking to the plan is also very important for growth and sustainability. A marketing plan is a good place to start; if nothing else the SME must at least have a market focus. Identify your market - figure out why you have a business relationship with you existing customers. Develop a profile of customers that you want to service. Fire those customers who do not fit that bill. If you have done a good job of customer profiling, your most profitable customers will automatically be retained.
2. When profiling customers, you must also ask “what are you good at.” Look at the strengths of your key people; what technologies are you collectively good at? If nothing else, a few calls to your customers will give you the answers you seek. No need to get into a formal marketing research campaign - few basic questions like “What about our product/service do you like?” and “what do you not like?” and “why do you buy from us?” should get you on track.
3. Use the results from above to identify the message that you want to convey to prospects. Develop some compelling reasons for your prospects to do business with you. Create a ROI calculator using spreadsheets. Show them how much money they can save by using your product or service. Run this by your existing clients to see what they think? And when they talk - LISTEN. Answering the question “What is your product’s value proposition?” will also help considerably.Also, communicate this to your employees often. Just printing this and hanging them on your office walls is not enough. How many times have you read something that has been left hanging in your organization’s walls? Talk to employees - they are the front line people when customers call in. Get their buy-in.
4. Once this is done - follow your message in everything you do - from print to the web. Be consistent in your message. Your prospects need to learn how you provide value - educate them. Ads, where placed, will only generate interest - it will only get them to ask for more information … sell by educating them.
5. Do not bite off more than you can chew. Keep it simple and do not go into panic mode when you realize the amount of work that needs to be done. It is tempting to skip the above steps, but lack of discipline will result in stagnation and the old way of doing things in a chaotic fashion.

Follow a disciplined approach and the SME has a fighting chance, but not following these basic steps will certainly derail the SME.

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