Let me start by saying I love Seth Godin. He’s brilliant, a human with a head-full of knowledge and the unique ability to turn complex ideas into ones we mere mortals can wrap our heads around. Seth turns conventional wisdom upside down, pokes holes in truisms, discovers insights through some alchemy that few of us possess. In fact, I’ve just applied for his upcoming Medicine Ball Session in December and am holding my breath that I’ll be selected. But I have to say, 1 basket is definitely not enough.
Now that I’ve lost you, check out Seth’s recent blog “How many baskets?” http://bit.ly/s37XLt Seth uses the “eggs in a basket” metaphor for companies and their customers. He rightfully suggests that many companies mistreat their customers due to an abundance mentality, certain that plenty of others are waiting in the wings. Who can’t rattle off a list of companies that treat them with disdain, whether it’s their health insurer, bank, or cable provider?
Seth suggests that companies might consider instead having “one basket, cared for and watched carefully.” That’s when I started shouting NOOOOOOOOO at my computer. Perhaps I’m taking Seth’s proposal a bit too literally, but I have to scream out. For a company to have but one customer is a recipe for disaster. Let’s look at why.
A single customer that grows year over year is worth celebrating, particularly if that customer generates enough revenue and profit to meet one’s targets. After all, everyone knows it’s far more expensive to acquire a new customer than to grow revenue within an existing account. If you’re hugging your customer tight and delivering value day in and day out, they’ll increase their spend, refer colleagues, provide you a chance to up-sell /cross-sell, negotiate less and keep competition at bay. Cost of sales goes way down, and the company gets to focus on its mission and do the thing it’s best at: perform.
But here’s the rub. Things change and those changes can be big (think: Lehman or MF Global) or less obvious (think: new leadership.) Divisions fold, politics impede, management decamps, business strategies alter, bankruptcies occur, mergers transpire, somebody in your company REALLY screws up. You get the picture. A company can quickly find itself with no basket at all, or a basket so small there’s not enough business left to stay afloat.
So follow Seth’s advice to focus on and serve your customer as if they are the only one. But, please, have enough customers that if one or two goes away, your company won’t suffer. Trust me, you’ll sleep better at night.| Categories: Blog
Tags: business development, customer retention, revenue generation, revenue growth, sales, seth godin