Without need for build-up, here’s the point of this post:  Customer relationships matter because they create loyalty.

Customer loyalty represents the opportunity for predictable and profitable growth.  If you don’t care about those thing, there’s no reason to care about your customers.  In fact, if you’re not interested in predictable and profitable growth, simply abandon the customers you have and try to make up the revenue with continual new customer acquisition.

That’s the rub.  And the reality many businesses live day-after-day.

Customer relationships matter because of their value to your business.  It’s not selfish to say so, it’s more reality, we need loyal customers more than they need us:

Referrals

Loyal customers refer more business our way.  The better we treat our customers, help them, and add value to our relationship with them — the more our customers are willing to tell others.  We become a story they want to tell.  And they’ll tell it often.  What results in more people and businesses are drawn to us and the opportunity to become our customer.

Profitability

It costs less to sell to an existing customer than it does to find a new one.  We can speak with them differently, like family.  We don’t have to sell ourselves for each sale — they already bought that part of what we offer.  We simply need to make the right offer at the right time — our relationship creates those moments naturally.

Predictability

Often, customers who purchase more than once do so at predictable intervals.  The ability to accurately forecast and count on revenue is critical to a business.  Repeat purchases are usually far more predictable than new sales.  Predictability reduces pressure on cash flow and expense management.

Asset

Customers are arguably a company’s greatest asset.  If the time comes to sell our business or borrow against it, the customers we have help establish the multiple we set on the price of our business and supports our worthiness to borrow.

Definition

We’re defined by the company we keep.  And so is our business. The same applies to the company our customers’ keep.  We’re part of their ecosystem, as they are part of ours.  Quality of customer is greatly established by the customers we claim and routinely engage with in business opportunities.

Viability

Fool me once, shame on you.  Fool me twice, shame on me. That saying is one reason ongoing business relationships with customers is important — it proves viability of your offer.  This is especially true with new companies.  You can sell something once by being a great salesperson.  To sell it two or more times to the same person or company, you have to be a real business and your offer has to demonstrate value to the buyer.

Confidence

There are many times in the life of a business when talking openly with a customer has incredible benefit — prioritizing new features and projects, considering business opportunities, evaluating would-be competitors, researching markets, identifying trends, etc.  Having a pool of customers you can call on in such times to ask candid questions and explore ideas is invaluable.

Above are seven reasons customer relationships matter deeply to a business.

Do you agree? What would you add to my list?