This is the first of two posts that will show you why good customer relationships are important to help you get paid, get more orders and improve your cash flow.
‘Revolve your world around the customer and more customers will revolve around you.’
If you have good customer relationships, your customers are much more likely to:
- Pay you before they pay other suppliers (that’ll improve your cash flow!)
- Order from you again and
- Recommend you to others.
Those 3 essential things will help any business have healthier cash flow.
A good business relationship
A healthy business relationship is like any other relationship. It’s a good idea to be clear what you and your customers want from each other.
What does a customer want from a supplier (you)?
- Their order fulfilled correctly
- To feel appreciated and valued
What you want from your customers:
- To pay their bill on time (that will improve your cash flow)
- To reorder (you save on advertising and marketing costs)
- For them to recommend you to others (they become your ‘Raving Fan’)
Why should you value your customers?
Business owners often work hard to get an order from a new customer. It can take some persuasion to win new customers away from the competition.
To make sure your business gets great value and profit out of every transaction with a customer, everyone employed in your business must make the customer feel valued. More sales would help improve your cash flow so it would be nice to get another order from an existing customer.
How existing customers can help improve cash flow
To have an existing customer who reorders is a cost-effective way to grow a business. The time and costs involved in finding a new customer are widely accepted to be six to seven times the cost of supplying an existing customer.
Therefore, repeat business is much more profitable. More profits will improve your cash flow too.
An example – caravan campfire chats
Friends of mine (‘G ‘n B’) have been caravanners for over 30 years, including a stint of nine and a half years as ‘grey nomads’. One of their favourite campfire conversation starters is to ask those around the fire about their vans and if they’d buy the same van again.
While one or two brands are generally viewed as less favourable, most brands are fairly comparable in their price, available layouts, extras, finishes, etc. The campfire chats reveal that people’s satisfaction with their caravans has less to do with the actual van but more to do with the service they receive.
G ‘n B concluded that there are two types of owners: those who like their dealers and those who don’t.
Those owners who had a good experience choosing and ordering their vans, who had an honest, attentive dealer and good after-sales service love their vans and recommend them to anyone who will listen (they become a ‘Raving Fan’). They swear that they’d never buy anything else.
Those who had dealers who were pushy or inattentive, had poor attention to detail, didn’t return their calls or offered poor after sales service complain bitterly about their vans and swear that they’d never buy that brand or go to that dealer again. That won’t improve the dealers’ cash flow…
Caravan owners are not the only people who value good customer relationships.
Building good relationships with your customers
What can you do today to build stronger business relationships with your customers, so they get to like you and pay you on time?
If this is a whole new approach for you, put a couple of large signs up to remind you and your team to talk to customers, so they feel welcome and valuable. (I put signs up all around me when I’m trying to adopt a new habit).
You could write something like this:
‘What do I need to do today to build great business relationships with my customers?’
‘What do I need to do today to start to get my customers to like me?’
The more your customers like you, the more likely they are to pay you, buy from you again and recommend you to others. I proved that in my own small business which became very profitable for those 3 reasons. All those positive things will help improve your cash flow and profitability too.
To your business success!