There is a business indicator that nobody considers.
Everyone uses KPIs of all kinds related to sales, or production, or logistics, or financial ratios, etc.
But there is one that I never hear of, and that should instead make you prick up your ears.
It’s the average age of our customer base.
How long have our customers been doing business with us on average?
If today, for example, we have 3 customers who have been with us for 30 years, perhaps acquired at the beginning of the history of the company, the average age of the customer base is
(30 + 30 + 30) / 3 = 90 / 3 = 30 years.
“What do you mean? The longer they stay with me, the better. This means that I have been good at serving them. Our relationship is solid, it is a love that lasts in time”.
Having customers who have been with us for 30 years is extremely important; let’s hang on to them.
But if the average age of our “customer base” rises from year to year, there is a downside: it means that
WE ARE NOT ACQUIRING NEW CUSTOMERS.
And letting the average age of the customer base rise from year to year is very risky: what happens then if one of these customers falls in love with another supplier, or starts buying less and less because he has problems, or there is a technological shift in the market that sweeps it away? (think of Olivetti, or Kodak) …
“That’s not good at all”.
So, what can we do?
While we continue to love our old customers, we must always be in search of new loves.
We must never deny ourselves the chill of the feeling that women call “butterflies in the stomach” (men have other indicators, but I don’t want to unleash hell now 😉
In business language, this means one thing:
We have to carry on lead generation strategies consistently, year after year, so as to keep our customer base constantly young.
Let’s take the previous example:
If this year we acquire at least 1 new customer, next year the average seniority of the customer base will be
(31 + 31 + 31 + 1) = 94 / 4 = 23.5 years old
We will feel the butterflies in the stomach (again, this belìn of butterflies), and we will have revitalized the company.
In short, let’s always remember: new customers keep the company young. Like new lovers.
And how can I keep myself active in the field of “picking up” in business?
If you want to always feel in love, and find out what works today to find new customers, subscribe to this webinar: