The Human Side of Business
If you run your business strictly by the numbers (merchants, I’m mainly talking to you), you will ensure lower levels of profitability and greater levels of competition in the long run.
How is that possible?
Profitability is driven by loyalty. Your loyal customers shop you more often, tell their friends about you and tend to avoid your competitors. Loyalty develops as a consequence of doing something meaningful for people. “The numbers” strip out the human element—it doesn’t help you focus on what’s meaningful to your customers.
A blaring example is the decision to outsource your call center operation for customer support. No question—the cost savings in the short term can be enormous. But what’s the long-term customer attrition rate?
It costs fives times more to acquire a new customer than keep an old one. A high attrition rate means you have to funnel your resources into marketing and advertising in order to continually acquire new customers because you can’t keep your old ones.
Online retailer Zappos has over 75% repeat customers. Yes, they invest heavily in training and supporting their in-house customer service staff, but their 62,000% growth rate over the last 8 years speaks for itself. CEO Tony Hsieh doesn’t run Zappos strictly by the numbers, but instead keeps his focus on loyal customers and innovates around their needs.
Honor the human element in your business. Celebrate your customers. Support your employees. You’ll build more profitable businesses and you’ll also feel better about yourself.
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I asked Office Depot where their call center was located.
She said the Mid-West…in Georgia. Ha!