In the last post, we digressed a little to give room for folks who are just starting out in business.
We explained The Golden Circle of Business in simple terms.
If You did not read that post and You are just starting out in business, You can still read it here.
A brief recap will not hurt anybody anyways, here are the 3 major questions You MUST ask before “opening shop” for business:
- WHY are You going into business? (Which problems do You hope to solve and Why should we take You serious?)
- HOW do You intend achieve (1) above
and finally when You are done answering the 2 questions above,
3. What are You offering the world?..(which Products and/or Services are You offering us to achieve the WHY of your business).
That is a brief summary of The Golden Circle of Business.
Now lets proceed to the business of today.
If You remember the definition of Business we gave in the introductory parts of this series, we said
Business has to do “meeting people’s needs at a profit”.. Do You still remember?
PROFIT is an integral part of business and PROFIT doesn’t have to be MONEY alone.
A social entrepreneur who is working towards eradicating polio in some parts of Nigeria might not measure his/her profit in Naira and Kobo, maybe they can measure “profit” by the number of successful polio preventions or the number of polio-infected people treated.
I dont know if You grab what I am trying to explain?
Let me break it down further,
In business, we have a DEFINITION OF SUCCESS which is post commonly PROFIT.. AKA Selling Price is greater than Cost Price
BUT, like we established earlier in the series, not every Business venture sets out to make MONEY, some are out for a Social Cause but along the line, they can make some profit.. Do You understand?
Now that we know Profit is an integral part of business, where does Profit come from?
This brings us to today’s discussion.
Profit comes from the CUSTOMER.
As a matter of fact, the VALUE CHAIN of your Business is not complete without the Customer.
Of what use is your Shoe Business when You have manufactured very elegant, durable and affordable shoes but nobody is buying from You?.. Are You really in Business?
Who is the Customer?
The Customer is anybody that consumes your PRODUCTS and/or SERVICES.
The Customer is that person (or group of persons) with the PURCHASING POWER to patronise your products and/or services?
If You notice, the second definition introduced the term “PURCHASING POWER”.
Not everybody is your customer.
I don’t know why I am using a Shoe Business as an example in the series but lets assume You are in the shoe business, everybody wears shoes right?..but can everybody afford the shoes You sell (no matter how cheap)?… I am sure You know the answer is No.
I remember when I was in Secondary School, Mr Afolabi our Economics teacher taught us that EFFECTIVE DEMAND is determined by the WILLINGNESS and ABILITY of the Customer to pay for your products or services.
It is very practical..
Have You ever seen something You liked but You couldn’t afford?.. Obviously, You should have.
Did You like the product? Yes.. Did You buy it at the end of the day?.. Well, maybe You went back to double your hustle, made some more money and came back like “Bang dang dang dang” but at the moment in time, You didnt buy it because You couldnt afford it.
For instance, I love Mercedes Benz cars, but currently, what I am driving now is a Toyota.. LOL
Do I like Benz cars? Absolutely!!!… If we no like Benz wetin we gain na?
Am I Mercedes’ customer yet? Well, for now, No…but WHEN I Hammer lasan!!!…dem go hear am.. 😎
Do You understand the concept I am trying to pass across?
Let me summarise it in 3-4 points.
- Your Business needs Customers to make profit (whatever You define as profit).
- Not everybody is your Customers.
- Your customers are those set of people who are WILLING and ABLE to pay for your products and/or services.
- It is your job as a Businessman to identify and have a laser focus on your Customers.
Actually, the remaining part of these series will be focused around THE CUSTOMER.
That is exactly how important your Customer is.
All the tools and techniques we will be discussing will be focused around the ACQUISITION and RETENTION of Customers.
Have You heard the saying “CUSTOMER IS KING” before?
That is exactly what a Customer is.
If You want to imagine and visualise what a Customer is, let me give You a visual example.
Have You seen epic or medieval themed movies recently?
I recently started seeing the series Game of Thrones (my bad I used to be a Nerd..now I am a born again Sweet Boy..LOL)
In the movie (if You have seen it) there are different KINGS and LORDS, each one with its peculiarity and taste.. that is exactly what each Customer is.
Each Customer is a King but they have different tastes and interests and your job as a business person is to see to it that they are happy else they can “behead” your Business like they did to Ned Stark.
One of the parts I loved in the movies was when Rob Stark was declared the King in the North.. I loved the way they hollered “The King in the North! The King in the North!! The King in the North!!!”
That is exactly how You should be hollering whenever You make a new Customer.
Say You are in Lagos and you acquire a new Customer, You should be shouting “The King in Lagos! The King in Lagos!! The King in Lagos!!!”…”Long live the King!!!”
Just make sure You are hollering inside your mind so they don’t think You are running mad..like the mad King…but top of all treat the Customer like a king.
I will see You in the next post.
I am Seun Ogunmola I help People and Organizations to leverage on Technology to achieve their goals Faster, Easier and Cheaper.
I also write on diverse subject areas including Finance, Business, Productivity and Governance.