How much is a new customer worth today?

When you own your own business every customer is important.  Businesses spend thousands of dollars trying to attract customers and hopefully keep them all.  There is an old saying- that says a happy customers tells a friend, but an unhappy customer will tell the world-average 10 people! And the scary thought about that quote, its pre social media.

Depending on your type of business you will need to estimate the short and long term value of each new customer.  You may be surprised, for a small ticket item like coffee, it has a large life time value. Let’s think about how addictive coffee is, how predictable peoples patterns are and you have a formula to capture a life long customers for your coffee shop.  In 2010,  there was a marketing study done by kissmeterics that calculated  that the life time value of a Starbucks customers $14,099!  If you knew each new customer you attract is worth $14,000-would that change how you viewed them or treated them? Something to think about.

How can you estimate this for your business:

Hire a professional marketing  and research company

Search on line for similar businesses and see what information is available to give you a guide

Do you own research: look at your monthly and annual records.  Look for patterns.  What is your average sale? Does that sale change by day of week or seasonally?  By what percentage is your business growing? What marketing channels are you using and what are the results coming in?

Check with town and state Census data to learn on average how many people enter the area each year and leave.  Those estimates will give you an idea of your growth curve or potential attrition each year

Now that you have an idea of what each of those new customers are potentially worth to you, what happens if they are unhappy.

Apps on our phones allow unhappy customers to become instant thought leaders or business crushers.  Yelp, Twitter, SnapChat, Facebook, Instagram and more, allow instant feedback-good or bad.

I don’t want to scare you but it’s important to think about  this- If a customers has an unsatisfactory experience at your business and they have a robust social network, how many people are viewing their comments-100 people, 1000 people, 100,000 people.  Frightening!

For many businesses this is a frustrating thing and something they need to handle.  In many cases, you cant “fix it” but you can respond quickly.

The most important thing when handling an unhappy customer: do you very best to handle the situation in the moment.  If that is not possible, keep a close eye on your social media.  An unhappy customer will try to warn others and most likely will tag you in their posts.  This is your chance to respond promptly and make an attempt to answer the concern.  Reaching out directly with an apology about their unsatisfactory experience, offering a solution to the situation and being open to please them is KEY.  Others who may see their unhappy post will also see that you responded and replied with earnest to rectify things.  That is what matters-a reasonable person understands that things can happen and its how you react afterwords that speaks more about the character and quality of your business. As difficult as it is to hear negative things about your business, it may make you aware of a growing staff problem or faulty product.  That feedback, allows you to take action quickly to make your business stronger and better for tomorrow’s customer.

And as we just learned, tomorrow’s customer is worth a lot more!