It has been reported that the leadership at Walmart takes the retention of their customers quite seriously, and they very badly want to keep their lifetime customers. In their research they have discovered that each one of their typical lifetime customers is worth a quarter of a million dollars. That’s a lot of money!
Think about it. At Walmart, just some of the items a typical lifetime customer would purchase are: groceries, small appliances, toys, garden supplies, electronics, sports and fitness, clothing, household items, pharmacy, automotive services, health and beauty, and pet items. Over a period of 25 years it wouldn’t take much to add up to $250,000.
It stands to reason that your business and mine are a lot like Walmart’s in that we want to keep as many as possible of our customers for life. Loyal customers are the lifeblood of every business. Without them we wouldn’t be able to maintain a very profitable business.
When you stop to think about it, the only people standing between you and your lifetime customers are your employees.
You are probably familiar with what the answer was when one business owner asked another, “How many employees do you have working for you? The other small business owner replied, “About half.”
All kidding aside, let me ask you this question: “How much is each one of your foremen worth to your company?” For the sake of this article, let’s use a yardstick of just one year. Hypothetically, if the amount of money one customer would spend with your company over a 12 month period is $20,000 and we take a group of 10 of your customers then that group of customers would be worth $200,000 in annual revenue. Over the course of a year, if your foreman comes into contact and works closely with these ten established customers, then he is managing a $200,000 book of business.
In today’s economy we can’t afford to retain managers or frontliners who have the wrong attitude, or are lacking the necessary people or technical skill sets. These people are non-productive and take money away from your bottom line.
Some business owners are reticent in investing in training of their employees, offering the excuses they cannot afford to invest in them, or if they did, they would be afraid the employees would leave and go work for some other company. To answer these concerns, I remember how one business owner told me that he couldn’t afford not to train unskilled employees, keep them, and then have to pay their regular salaries and benefits. As he explained it to me, “I have to look at each one of our employees as a potential profit center. If they don’t produce, I don’t make money.”
You need to hire the best people you can find and prepare them through the right kind of focused training and development programs.
Tom Borg – All Rights Reserved