Sales vs Customers

Every business needs to make sales.

Sales however shouldn't be the primary business objective.

Sales are a consequence of having and nurturing customers.

Sales themselves give no indication as to the status of the customer that transacted with you. Sales themselves tell you very little about the future sustainability of a business.

Maybe a customer only bought something from you because you marked down your product and you'll never see them again; maybe the experience that they had with you the last time they bought something will ensure that they'll never transact with you again.

In both of these scenarios - your sales numbers are an indication of long-term business failure and cause for great concern.

What you really want to build are good customers.

“You really do need to allow for the fact that different customers are different from each other. You have some who are valuable, and some who are not so valuable.”–Daniel McCarthy

The intention should be on creating a customer community who are big fans of what you do; engaged, happy to pay a premium for your product and reluctant to switch to an alternative.

In marketing terms then you want to measure the quality of your customer base according to these loose metrics - not sales.

Valuable brands and companies are those that have a high customer lifetime value (CLV) - the present value of the cash flows that a customer generates, while they are engaged with the firm, minus the cost to acquire the customer.

Your business is only as valuable as the customers that support you.

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P.S - Clarify your strategic intent

Over the years, Jonathan Cherry has consulted to numerous organisations helping them clearly define their strategic intent and strategy map for accelerated business growth and resilience in uncertain times.

If you need a facilitator to take you through this process for your organisation, please get in touch here to chat with Jon.