Regardless of industry and regardless of whether it is a not-for-profit, family business or multi-site business, almost every business makes this one key mistake: it focuses on existing business to the detriment of acquiring new business.
For some businesses it may be a tiny stumble that they recover from quickly and easily, but for others it can go on to the point where it threatens the future of the business.
It’s easy to see how it happens. In the startup phase, businesses make every effort to build a customer base. In the establishment phase, however, businesses become complacent about their customer base and fall into the trap of busily servicing the customers they have without actively looking for new business.
This underinvestment in a customer pipeline renders the business blind to possible future earnings and when it suddenly runs short of customers, it is forced to scramble for income. Revenue becomes sporadic, spluttering between feast and famine. As you can imagine, this precarious position leads to pressure on staff and can be highly stressful to CEOs and business owners.
Unfortunately, many business owners misdiagnose this state of affairs, often blaming fluctuations in the economy or increasing competition for their hardship when it’s actually something they can easily fix with better time management. Yes, sometimes external circumstances out of your control can contribute to a quiet period, but many are avoidable. You can reduce the severity of a slow period by making it a habit to develop a customer pipeline replete with new business.
Customers come first
Business expert and author Peter Drucker once said: “The purpose of a business is to create and keep a customer.” Quite simply, without customers, you don’t have a business.
If you’ve invested in fostering repeat business, I commend you for this excellent practice, but you’re only partway there. Only focusing on repeat business won’t support business growth in the long run because you can never rely on 100% of your customers returning. If you spend all your time managing current customers, by implication that leaves no time to create new ones or build a pipeline to ensure steady revenue. The result is a diminishing customer base and diminishing returns.
Do you find yourself spending all your time responding to immediate issues, like client requests, admin, or staff complaints, instead of focusing on new sales? Make some time to grow your business. These issues still need attention, of course, but they should be conducted in tandem with the task of growing your enterprise to its full potential.
Stay tuned for our next post for a practical way to do this in day-to-day business.