Most likely someone told you some story or another when you were little. Although it seemed like they only meant to entertain you, in the majority of cases there was a hidden moral. Don’t take them lightly, because they usually have the ability to, in a simple, direct, and illustrative way, enumerate the pros and cons of acting in one way or another in our lives. The story of the grasshopper and the ant comes to mind, and though it seems strange, it reminds me of the way in which many companies behave with their customers.
When we compare them, there are many companies that develop on the market like the grasshopper. Searching for customers, they are capable of using all their resources in order to increase their customer base, increase their sales, and enjoy commercial success in the shortest time possible. On the other hand, other organizations – not many, to be honest -, adopt an attitude closer to that of the ant: they think in the long-term, they carefully observe the market, and they prepare it so that each of the company’s customer segments evolves with the company, bringing the greatest possible return in value. Can you guess which one is most likely to survive in the future?
The customer is a scarce asset, and that goes for both grasshoppers and ants. There is an increasing amount of products and services to choose from, greater competition, and more information to compare. It’s not easy to attract consumers’ attention. Faced with this situation, it’s easy to let the circumstances lead and adopt short-sighted and unfortunate decisions: lowering prices in order to break into the market, carrying out aggressive advertising policies, and exponentially increasing spending in order to attract anyone to the company’s offer. Being a grasshopper has its advantages, and it can make the stockholder happy.
However, in the long-term, success can kill it, because the customer value is not determined by what he or she is willing to spend on us at a specific moment, but rather by the benefit he or she can offer us over the entire course of their link to our proposal. We should add to that the fact that no two customers are the same, and that there are profiles that, although they represent an important part of our revenue, can bring low profits and cost us a lot in resources, so that putting the same dedication into them as all the rest automatically results in losses.
Winning customers over is important, but when our aim is off and we don’t have an intelligent segmentation that indicates to us where we should direct our offer, we end up thinking only of the transaction, and not the consumer. The essential thing is not to be the most aggressive, but to know how to gain the consumer’s confidence. It’s an unspoken agreement between both parties: if the company adapts itself to the customer and is able to anticipate customer needs with an adequate service, the customer will likewise prolong his or her relationship with the company and increase its value. In fact, that communication ends up making the customer our best investor, because they participate – and how – in our company’s destiny.
Like the grasshopper, we tend to become impatient and look for immediate results, but this is not appropriate when it comes to the company’s profitability. Making decisions in this field demands balance and restraint, both in marketing actions and service offers. In the end, the key is in how attentive we are to our customers.
ROC (Return On Customer) is the parameter that will allow us to know if the relationship between profit and the way a consumer’s value changes is positive or not. Put ROC and the essential ROI at the same level, because one makes no sense without the other. Learn to base your decisions on the customer. Like the ant in the story, you’ll be protecting yourself and assuring your future.