The leaky bucket theory is a model that seeks to describe “customer churn”.
In order to grow a business you need more new customers than you are losing to your competitors – the difference is the churn.
Guess what the prescribed magic fix is? Customer relationship management. Just three words.
What if you have thousands of customers? How do you maintain a relationship with 10,000 people, when you battle to manage a handful of relationships with friends and family?
The short answer is that you can’t have a relationship with that many people in the ordinary sense.
An insurance broker, who has 100 clients, might be able to maintain a personal relationship with all of them, but he can’t scale his business. If he wants to get bigger he risks losing the personal touch that made him successful to begin with. That’s why small businesses remain small.
But the small insurance broker might have the last laugh.
The small insurance broker knows one thing that big business doesn’t – relationships count more now than ever before.
If you sell any product or service, there will be a point where your customer looks at a competitive offer and might be tempted to test the waters.
The only thing that will be standing in their way is the trust that you have managed to build in that relationship, up until that point.
- If no trust exists you will lose them
- If some trust exists they might test the waters and be back
- If trust exists they aren’t going to budge
Happy customers don’t leak out of the bottom of the bucket, they invite their friends and family to jump into the bucket with them. The only way you know if they are happy, is to ask.
The one thing you can guarantee is that they all have an email address. Why not try reach out and say “Hello” before you competitor does.
Until next time.