One of the most valued assets you own as a business is your customer list.
Yet I’m stunned at how often this priceless gem is treated as an annoyance – even by very successful enterprises.
Case in point…
Not long ago I had a chat with the principal of a $25 million a year enterprise.
First he gave me the tour of his facilities, he showed me his inventory, showed me the customer service department, showed me his thriving inside sales team, showed me the building he had recently purchased. It was all good. This was a very successful businessman.
But then the talk turned to his sales management systems…
I asked what they were using for a CRM/Sales Effectiveness solution. “Oh, they use ACT. It’s great. We’ve got all the customer data in there.” “How many customers do you actually have?” “Ummm? Well, I’m not real sure right now, but we are earning $25 million a year.” “Great. Do you know how many customers each salesperson manages on average – just rough numbers”. Now he managed to surprise me a bit with his answer. “What does it matter as long as they are making sales?”
This businesses Achilles heel had been exposed. And just how exposed he didn’t realize until after I met with the salespeople offsite.
During the offsite working lunch, I was looking for street-level insights on the market, competitors and customers from the sales-team. These are always taped. We uncovered some great insights. Ends up the company had a huge sales and marketing advantage that wasn’t being positioned to the market. That was the great news. Then the conversation turned to customer and prospect data-bases. I asked, “I’m curious, roughly how many customers do you have in your data-bases?”
One salesman stated he had 200 customers. Another said, “What, I have 5000. How can you only have 200?” The first rep explained that he only input the information after someone had purchased. He didn’t store any leads or active prospects in his system. One of the reps, who was responsible for 10% of the companies revenue, piped in. He said, “I don’t even put my best customers in the data-base – I’ve got their information memorized. They are too valuable to put into the system. What if it crashes??
And so the conversation goes. I burned it onto a CD and had the CEO listen to it on his drive home that night. I’m told that he almost drove off the road when he learned that 10% of his revenue stream was inside the memory of one of his salespeople – a salesperson that could get in a car wreck or walk into one of his competitors tomorrow morning.
Now, this businessman hadn’t grown a business to $25 million in just under 5 years by being stupid. So, this story has a happy ending. But it does put an exclamation mark on vulnerability that plagues many businesses.
That customer data-base is worth more than your buildings, your inventory and your people put together –
Treat it like the priceless asset it is.