Mon 22 Feb 2010
What is your organization’s magic number?
Searches resulting in your website? Visitors to your brick and mortar store? Subscribers to your social media page; fans, friends, feeds, readers? For each business owner the answer is different. I propose the answer is: 1,000 Loyal Customers.
Recently an excited Techlife reader called about to start a business. They had some great long term ideas on their success once they had tons of website visitors. But they were missing the element of growth in their plan. I politely listened to all their excitement and unbridled energy. But when I asked how would they get their first 1,000 Loyal Customers they didn’t know.
A Historical 1,000
In the days of the general store in America, small towns would have a single store that carried a wide variety of products. Often times this store was too small to carry all the things people would need, so a proprietor would stock catalogs from various places allowing a patron to pick out items that could be ordered and shipped to the store for future pickup. This made the customer loyal, partly because they had no where else to turn, and partly because in small towns supporting a local business was good for the whole town.
Fast forward to today, where there are megastores with megabrands advertising on megastations offering megasavings if you spend megabucks. Three example companies that have grown into megabrands Google, Ebay and Amazon don’t manufacture any “real” products (yes Amazon does have the Kindle, to push the purchase of more ebooks.) These three company’s are general store’s of data.
What is a Loyal Customer?
A Loyal Customer for most organizations is a person who actively seeks out your brand. Loyal customers aren’t swayed easily to switch brands. Loyal customers refer their favorite brands to others. Loyal customers ride out a small problem or a price increase. Most important of all, Loyal Customer’s return again and again.
1,000 Loyal Customers is admittedly simple math which states for each employee an organization needs a 1,000 Loyal Customers who return $100 net profit each year. Good examples of unique organizations with easy to spot Loyal Customers are local restaurants, local clothing stores, museums and summer camps. In each of these examples if the organization releases a new product or revenue stream Loyal Customers eagerly support the effort.
Techlife was once again inspired by Kevin Kelly, who’s column on 1,000 True Fans is aimed at artists such as; painters, musicians; photographers; writers and more. His goal is make those artists realize having a megahit is hard, but achieving 1,000 True Fans is enough to sustain the artist comfortably.
Start with One
When expanded to organizations, readers of Techlife are able to use online tools like websites and social networks to connect and build their community of 1,000 Loyal Customers. It may seem daunting, but break it down. Who are your Loyal Customers today? Where did you find them? Will they refer you to the next Loyal Customer?
Share with us in the comments. How many Loyal Customers do you have today? What’s your goal?