There´s an old saying, "you have to spend money to make money." Perhaps a corollary should be "you have to "spend time´ to make money. For example, do all of your customers buy equal amounts of your goods or services? Of course not. Whether you own a 3-employee retail shop or a 150-employee communications business, some of your customers buy more than others. What´s the worst mistake you can make when it comes to dealing with an important customer?I believe the worst mistake you can make is taking that customer for granted. He or she has bought from you multiple times. You´re busy dealing with other problems, customers, vendors, etc. and one day you look around and one (or more) of your best customers is gone. Why? Because you took her for granted and failed to spend time nurturing the relationship you had with her.
Michael Angelo´s Gourmet Foods is a maker of frozen Italian foods such as lasagna. They used to do business with Costco. Until one day Costco "froze" them out. (Sorry, couldn´t resist.)
In an Austin American-Statesman article about another company´s attempt to break into Sam´s Clubs, Joe Kent, Michael Angelo´s director of marketing said,
“We’ve rebounded but not without some pain, and I think we’ve learned a lot and are stronger for it,” Kent said.
At the time of the fallout with Costco, published reports said the account represented about $50 million in annual sales for Michael Angelo’s, and the company was forced to lay off 33 of its 180 part-time and full-time workers.
The article isn´t clear on why the relationship was severed, but Kent is clear on one thing they do differently.
It also has reassessed its relationship with major retailers.
For example, the company is in constant contact with its merchants.
“Does it change the way we value that relationship? It makes us a lot more cautious,” Kent said of the Costco incident. “And we want to make sure we do everything possible because they (warehouse stores) are a big part of our business.”
The company values its relationship with Wal-Mart.
“They are the biggest company in the world, and we like doing business with them,” Kent said.
And it´s clear from Kent´s comments that Michael Angelo´s is going to spend more time developing the relationship with Wal-Mart.
Notice what happened when Michael Angelo´s lost the Costco account? Revenue dropped and employees had to be laid off. Eventually they rebounded, but not, as Kent mentioned, without some pain. Pain that might have driven other businesses into bankruptcy.
Repeat after me, "I will not take my best customers for granted. I will not take my best customers for granted. I will not"?¦"
Do you know who your biggest customers are? By sales? By number of purchases? What´s your plan for nurturing the relationships you have with them?
No matter how large or small your business, don´t take your best customers for granted.
BTW, if you are involved with a small business and you use a blog, contact Paul Chaney. He wants you to be one of 52 blogs he highlights in 52 weeks.
"90% of all management problems are caused by miscommunication."
Glenn´s corollary: "90% of all marital problems are caused by miscommunication."