As a Customer Service advisor, I’m very sensitive to the evolution that has been occurring in North American CS over the last decade. This article did a great job of explaining how sales (i.e. generating new customers) has taken precedence over customer services (i.e. keeping old customers). Unfortunately, this is a very ephemeral mindset, and does very little to establish a brand and its reputation for the long term. While travelling in Britain, I was made aware of how well North American customers are generally treated – customer complaints are directed via per-minute phone numbers, rather than 1-800 freebies – and how poorly client loyalty fared when the customer wasn’t “always right”. North American business needs to adopt a holistic view of its approach to customers, before it turns into the swamp of Britain’s example.
The real problem may be that companies have a roving eye: they’re always more interested in the customers they don’t have. So they pour money into sales and marketing to lure new customers while giving their existing ones short shrift, in an effort to minimize costs and maximize revenue. The consultant Lior Arussy calls this the “efficient relationship paradox”: it’s only once you’ve actually become a customer that companies put efficiency ahead of attention, with the result that a company’s current customers are often the ones who experience its worst service. Economically, this makes little sense; it’s more expensive to acquire a new customer than to hold on to an old one, and, these days, annoyed customers are quick to take their business elsewhere. But, because most companies are set up to focus on the first sale rather than on all the ones that might follow, they end up devoting all their energies to courting us, promising wonderful products and excellent service. Then, once they’ve got us, their attention wanders…
Alternative Revenue Streams
I loved this article by the 37Signals chief, as it shows what can be done with some out-of-the-box thinking. The idea of alternative revenue streams is not a new one to me, thanks to a book I read for a very early business venture (selling culinary herbs) that advocated making money out of every bit of your business – even (when possible) the waste products. The author advised bundling the dried stems of dead plants for use as “fragrant firestarters”, turning this particular shop waste into a signature, impulse-buy product. There are opportunities out there for anyone smart enough to notice them.
For a few years, we’d been sharing our ideas on software design, marketing, and business on our blog, Signal vs. Noise. We’d begun to build a loyal and passionate following. So why not take advantage of that and hold a workshop about the things we were writing about on the blog? We could host it in the spare space in our empty office. And charge for it.
We put together a one-day agenda, charged about $300 a person, and sold about 30 seats. Suddenly, we found ourselves with $9,000 in additional revenue. Our monthly rent at the time was $2,500. In one day, we just paid more than three months’ rent. That was a light-bulb moment. An office can be free — and even a profit center — if you start thinking about your company’s byproducts.
What do I mean by byproducts? Just like the lumber industry can sell its sawdust (a byproduct of milling trees), we discovered that we could sell our knowledge (a byproduct of running a business). And we could sell it in our spare space. Eventually, we packaged this knowledge in book form. All told, the combination of the book and the workshops has brought in revenue of more than $1 million.
http://www.inc.com/magazine/20100901/the-truth-about-real-estate.html