How will your customers affect your business valuation?
Value in business isn’t necessarily monetary. Whilst revenue and profit are of course related to the value of your business, don’t underestimate how important it is to understand customer behaviour. Without them, it’s unlikely you’d have any form of revenue.
We aim to clarify the main questions you should be asking yourself when considering your customers.
Without being aware of who your customers are, where they come from, what they come for and why they come to you, it is difficult to gauge how to progress your business. This is in terms of product and service development, marketing strategies and forecasted spending.
Successful businesses don’t base their efforts on guesswork. They take the time to research and gain an in-depth knowledge of their customer base. Once research is gathered, they then tailor their products and services accordingly to meet and exceed customer expectations.
Customer loyalty and business value
The aim is to build the know, like, trust factor with your customers. The biggest brands in the world all started somewhere. Dimensional Research discovered that excellent customer service ranked number one on what impacts customers’ levels of trust with a company. Take Cadbury for example, so well recognised you could see their iconic purple and instantly recognise the brand and products.
Cadbury began humbly in 1824 with one shop in Birmingham selling tea, coffee and hot chocolate. John Cadbury’s venture began as a means to provide an alternative product to alcohol.
He had a clear purpose and knew who his target market was. He began a company with an ethos that still resonates today, considerate of social responsibility and reform. Fast forward to today, whilst the company was bought out by Modelez in 2010, it remains in the top 3 confectionery manufacturers in the world.
Improve your business value by understanding your customers
The Founder of stationery giant, Staples Inc, Thomas G Stemberg once said; “Forget ‘branding’ and ‘positioning’. Once you understand customer behaviour everything else falls into place.” With that said, what can you do to tap into your customers’ mindset?
- Take an inward view – what kind of service would you expect from your company if you were your own customer? Think in terms of products but also the wider picture, what’s the customer service like? How do the staff talk to you? Are queries dealt with how you expect them to be?
- Make them a priority – if you’re not thinking of your customers as you operate your business, then how are you appealing to them?
- Let’s get personal – According to a study by Accenture, 33% of customers abandoned a business relationship last year as a result of poor personalisation. Figures from Microsoft show that 72% of consumers expect anyone that they contact at a company to have data on them and use this to personalise a call or interaction.
Value in business isn’t always monetary, being able to demonstrate a clear understanding of your marketing strategies, customer engagement and retention, will be invaluable.
Knowing where your customers come from and being able to clearly articulate this is key for success.
- What marketing activities bring in your audience?
- Why do they work with you?
- What’s your USP?
- Do you know your NPS?
- What do you have in place to keep customers and clients on board?
How can customer satisfaction add value to your business?
Understanding this behaviour helps businesses to understand the types of people who need your products or services, and which they’re likely to want to purchase or use.
This knowledge allows businesses to;
- create targeted marketing campaigns,
- develop new services and products,
- forecast spending and create an improved customer experience.
……all whilst having the upper hand on your competitors.
Take time to build your relationship with your customers and see this not only as a means of prosperity and to demonstrate that your customer retention strategies are solid.
Now, we may have said that not all value in business is monetary. However, it is important to highlight how much of an impact understanding customer behaviour can have on your revenue streams. Happy clients and customers are more likely to develop loyalty to your company, allowing you to retain customers more easily.
Customer retention is the next step. Attracting a new customer being up to 7 times costlier than retaining a current one. And with 52% of consumers reportedly making an additional purchase from a company as a result of a positive customer experience, the figures speak for themselves.
We hope we’ve given you some figures for thought but if you’re unclear on how to invest in and ultimately profit from customer behaviour, then contact us in the strictest of confidence and we can discuss further.