A customer is an individual or business that purchases goods or services from another business.
Primary Implication
If you struggle to hold onto existing customers, you likely have employee problems. See the fifth organizing principle for employees to learn how to improve your customer retention.
If you are having trouble attracting new customers, then you likely have problems with the sixth organizing principle associated with marketing and sales.
Overview
A customer is a person or organization that purchases goods or services from another entity. Customers are essential to every business because they initiate the exchange of money made through their purchases that form the Net Sales of every business. Without a sufficient number of customers buying to cover the costs of the business, there is no business.
Thomas Watson Sr., the president of International Business Machines (IBM) from 1914 to 1956, coined the phrase “nothing happens until a sale is made.” This business truism is built from the hard reality that a sale isn’t made until a potential customer elects to become a customer through their purchase.
Every business’s success is proportionate to its customer base’s strength. Businesses with a stable base of repeat customers and proven processes to attract new customers are always worth more than businesses that struggle to get and hold onto customers.
Offer too narrow of a product or service to attract a large enough customer base leads to a failed business model. Clinging to one product, service, or anchor client because it brings in good revenue is risky. When demand for that one subsides, or you lose that anchor customer, your business will go on life support.
The hardest thing to do in business is to capture new customers at a profit. One of the easiest things to do in business is to lose a customer. If you are growing sales through a mix of repeat and new customers, then you have a healthy customer base.
