November 8, 2012

The Hidden Value of a New Client

I often see my entrepreneurial friends focus heavily on business strategy, operations, administration and internal management – and often overlook the core part of any business, the sales process. Although every one of them agree that generating new sales is the heart of any business and emphasize its importance, many of them may not realize the full extent of bringing on each client, even if the net profit may be small.

  1. In the technology sector where company valuations are as high as 10-15 times yearly earnings, a client that generates an extra R15,000 per month for the business can increase the business’s valuation by up to several million rand. If the entrepreneur owns most of these shares, he absolutely needs to think about things in this way. Even a R5000 per month deal that’s been locked down can mean R500k more in your pocket when the business is sold.
  2. In this hyper-networked world, a key client will have executives that are within two degrees of the executives of every other company in the industry. Bad news travels fast, but good news can travel just as quickly if client satisfaction is retained. Each client should be treated as a godsend and taken care of, as they can literally make or break your company.
  3. I deal with innovative brands on a daily basis, and am very happy to see many of them migrating to a culture of experimentation and thought leadership. Brands, in their constant need to differentiate, are striving more than ever to connect with their customers through as many touch points as possible. This development has led to a greater willingness to differentiate products and services. A client can always be upsold with a variety of additional products as long as they provide value to their consumers.
  4. Every client presents a learning opportunity and a constant potential pivot of my own businesses. My agile approach to business means I am always innovating the business models according to the market, and every client presents me with a wealth of data surrounding their needs and wants that I use to optimize products and processes. And to think I get paid for it too!
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