This spring I completed my 100th business assessment – this for a builder of custom resort houseboats in Sand Point, Idaho. I endured the discomfort of a late spring snow storm and spent a lot of time in a large, cold, warehouse consulting with my client as he supervised the construction of the first prototype houseboat.

On the drive home from Idaho, I had a chance to reflect on these 100 business assessments and it came as no great revelation that number 100 was not dramatically different from assessment #1 conducted for a local reprographics business.

Over and over I hear clients express the wish that they had more business, that they could better and more easily manage the requests for advertising they receive, some every day. Many clients still believe the answer to their sales problem is the preparation of expensive materials, ranging from brochures to web sites. Do they want to win new business or woo back old customers?

Back in Idaho, the inventor of this new resort houseboat told me getting customers would be “no problem” because so many people had already stopped by to see the construction and express interest in renting the boat.

“Getting customers will be easy,” he said confidently.

When I suggested he immediately begin building a data base (list) of people who were expressing so much interest, he said he did not have time at the moment to deal with that and that he was not a “computer person.” When I suggested he get a file box and at minimum collect names and addresses, he said he would do it. I said we would help develop a simple postcard to send to these people, to invite them to the christening. All we needed was a mailing list. He had no money to prepare publicity or buy advertising.

Six months later, the houseboat sits unrented for weeks at a time during the peak rental season. He has no customers and he does not have a list of all those people who stopped by. He’s talking a lot about next year and hiring a rental agent.
He’s squandered an enormous opportunity and wasted thousands of dollars in construction loan fees, all because he (perversely?) did not want to ask people if they would be on his mailing list.

I make this point in such painful detail because my clients who need more business often mean they need new customers and that is usually not the case. They have customers. They have no mechanism to regularly reach them and build that all-important relationship.

Every single one of my 100 business assessments has first focused on customer retention, getting the most our of your current customers. Then you can go in search of new business.

But without a mechanism to reach your customers you must begin all business development from scratch — infinitely harder and more expensive. Experts say it is ten times more difficult to win a new customer than serve one you already have.

The business world is abuzz with the term ‘CRM’ and it means customer relationship management. I call it hanging on to your customers, cherishing and rewarding them. And you don’t necessarily need a computer data base. But if you don’t build a mailing list, from day one, you’ll be treating every customer outreach effort as its being done for the first time.

And that’s the sort of inefficiency that quickly kills a business and ends a dream.

Anyone want a really good deal on a late summer houseboat rental in Idaho?

(Editor’s Note: Bill Hoke manages Hoke Consulting, a Poulsbo based marketing, sales and communication company. His clients include established local businesses, Internet companies and retailers. He provides planning service and creative development. He can be reached at 360-697-4653 or whoke@grafhoke.com.).