04 MAY 2019
Your number 1 profit lever
by Steve Yastrow: Author, speaker, consultant and founder of Yastrow & Company, a Chicago-based consulting firm.
A quick Google search for “how to increase profits” came up with dozens of lists, tips, and strategies to improve the profits in your business:
- 10 Tips to Increase Profits in Your Business
- Top 17 Expert Strategies on How to Increase Profits
- 6 Ways to Increase Profits for a Small Business
- 30 Simple Ways to Increase Your Profits
All of these lists are missing the #1 profit lever that can have the biggest impact on improving your company’s performance: Customer Commitment.
We have much more untapped potential to drive revenue than we do to reduce costs because we have significant untapped potential to increase the commitment of our customers.
Yes, most companies have opportunities to cut costs and improve operational efficiencies. Maybe, with significant effort, you can knock a few percentage points off your labour costs. However, a strong top line is usually the most powerful path to improved profits. And in most cases, it would take less effort to add enough revenue to the top line to drop more than a few percentage points to the bottom line.
Like most companies in the world, you probably have some customers that really love you, only a few who don’t like you, and many who are indifferent to you. What if these indifferent customers loved you? What if these customers were really committed to your company?
A committed customer will buy more from you and pay more for your products and services. They will enthusiastically refer you and complain less. They will cost less to sell to and service.
And most companies don’t have a clear strategy to increase customer commitment. Sure, many companies have marketing plans, sales efforts, customer service departments and, in some cases, loyalty programs. This isn’t enough.
You must be laser-focused on developing the deep commitment of your customers. You must communicate to all of your employees that their true job is to work as a team to develop customer commitment. And you must provide your employees with the tools and skills to develop their commitment.
Developing the deep commitment of your customers requires your company to create compelling customer experiences that clearly communicate why doing business with you benefits them. Customers have choices, and they will only believe in you and commit to your company if all interactions with your company blend, in Brand Harmony, to give them a reason why.
In addition, creating compelling customer experiences requires your team to be committed to your customers. Your employees need to understand that their most important role, no matter what their job description, is to contribute to developing customer commitment.
So ask yourself: Are we doing everything we can to develop the deep commitment of our customers, so they give us a substantial share of their love, loyalty, and purchases?
If your answer is “no,” I have good news and bad news. The bad news is that you are leaving lots of money on the table. The good news is that, if you create an all-company focus on developing the commitment of your customers, the profits will start flowing.