Do you serve Clients? Or customers?
As any small business owner knows, the customer rules. Or maybe it’s the Client. The terms are not interchangeable, and you can optimize revenue by revisiting the differences.
Some businesses have mostly one or the other. A food franchise, for example, has mostly customers; a consultancy, mostly Clients. In some cases, there’s room for both.
While there are significant differences between Clients and customers, here’s something they have in common: It’s significantly cheaper to retain a good Client or customer than to acquire a new one. And a corollary: complaints get more attention than compliments.
At the most basic level, customers seek a transaction; consistency is key. As long as the hamburger you serve up today tastes as good as the one you served last week, with the same friendly smile and clean environment, your customer will be happy.
In contrast, Clients seek a relationship with your business—one that’s ideally deep and long-lasting. You and your Client know a lot about each other, and that knowledge produces results that benefit both parties over time.
Think of an investment advisor who knows more about your personal finances than most of your friends. And you’re both good with that precisely because the depth of your relationship lets the advisor do a better job—and earn fees you pay for the service.
A Client relationship is also built to last much longer than a customer relationship. Unless something goes horribly wrong, you and your stockbroker are in it for the long term. It doesn’t do either of you much good to be constantly switching providers or churning the Client base.
If your business is primarily Client-based, it’s smart to spend at least as much time nurturing existing relationships as you spend seeking out new ones. That means regular check-ins just to see if any of your assumptions have changed. It also means giving Clients a heads-up if anything will be changing on your end. Like a new fee structure, a new login protocol or a new product offering. It takes effort to maintain a Client relationship. But if retention is a major goal, and it should be, the effort is worth it.
The cost of attracting new business exceeds the cost of maintaining the ones you have. And if a Client or customer relationship ends badly, it can create potential headwinds. Disgruntled Clients and customers insulting your business get more attention that delighted Clients and customers extolling the benefits of your business.
In some businesses, you can convert a customer into a Client. For example, a well-run auto dealership will sell you a car, then give you reasons to return for service. Each of those transactional encounters can strengthen the customer relationship. At some point, you might return to buy another vehicle and start sending friends and family members when they need new wheels. Eventually, you become the dealership’s Client, not just a customer.
At Expansion Capital Group, we seek and nurture mutually rewarding relationships with Clients in more than 650 industries. Our professionals partner with you to craft financing that’s ethical, transparent and responsive to your needs. Contact us at (877) 204-9203 to learn about available options for establishing, buying or growing your business.