Betcha don’t know your two most valuable assets
By Rich Lindblom, AVB Marketing
Without reading ahead … write down what you think are your company’s two most valuable assets.
When listing their most valuable assets, far too many business owners will cite tangibles like:
- Their store/real estate
- Their fleet of vehicles
- Their inventory
While each of those do have value, the value is strictly monetary, and things with monetary value pale in comparison to things with intrinsic value. Intrinsic value is longer lasting and much more powerful.
For that reason, I believe loyalty is a company’s most valuable asset.
Loyal Customers
There’s nothing more valuable than a loyal customer. If you treat a customer well, they will do business with you for years and years. Not just that; they will also be your company’s biggest advocate, telling friends, neighbors and family members about your store, which leads to multiple generations of business from a single customer. But it even goes deeper than that. Take a look at these statistics:
- The probability of selling to an existing customer is 60%-70%, while the probability of selling to a prospect is 5%-20%
- The cost of acquiring a new customer is estimated to be seven times higher than the cost of retaining an existing customer
- Sixty-five percent of a typical company’s revenue comes from existing customers
Every customer matters, and no business can afford to lose customers for any length of time before it starts to impact their bottom line. I’ll be the first to tell you that it’s OK to fire a bad customer, but you must take care of the good ones because they are the people who are paying your bills every month.
See: The Secret to Customer Satisfaction
One quick suggestion would be to implement a customer loyalty program. If that’s too much work, how about offering your loyal customers a special price for your services, like repair call/trip charges, delivery fees or installation charges? It doesn’t have to be substantial, but do something for them, to let them know how much you appreciate their business.
Loyal Employees
A close second to loyal customers is loyal employees. Your staff is the life blood of your company and needs to be treated as such. I’m not saying you need to bow down to them or worship the ground they walk on, and certainly don’t let them walk all over you. But you do need to take good care of them, thank them for their efforts and reward them for their performance when justified. Here are some more interesting stats for you to consider:
- The average turnover cost per employee is equivalent to six to nine months of an employee’s salary.
- The average cost to recruit a new hire is estimated to be nearly $5,000, and takes an average of six weeks.
- On top of the cost of hiring, the average onboarding cost for a new employee is over $4,000.
- Perhaps most telling of all, over half of employees who quit said their manager or organization could have done something to prevent it.
But the importance of retaining your good employees goes far deeper than that. When you lose a staffer one of two things happen: either someone must cover for them (quite often the owner or manager of the company) or all too often you simply lose the revenue the employee generated.
A quality service technician will generate as much as $5,000 per week in service revenue, and we all know how hard it is to find a good service tech these days. If it takes you three months to replace a technician (and that’s being optimistic), your company will lose $65,000 in revenues during that time. I personally know dealers for whom it took up to a year to find a replacement for a lost technician, which means $260,000 in lost revenues. Ouch!
As I noted, all too often it is the owner or manager who must cover for a lost employee. So ask yourself: if you must go out on the delivery truck or sales floor, who is going to do your job?
The bottom line is that you should never take your two most valuable assets for granted because they are the key to your company’s long-term success. Take care of your loyal customers and employees and they will take care of you.
Rich Lindblom is a past principal of Chicagoland’s Advanced Maytag Home Appliance Center and a member of BrandSource’s Maytag Channel Council. After four decades of working at and eventually leading the 64-year-old family business, Rich and his brother sold the operation. He now shares his hard-won retail know-how with BrandSource dealers as a YSN columnist and member of the AVB Marketing product team. Contact Rich at rich.lindblom@avb.net.
