The Value of a Customer

By John Malmo

http://stream.publicbroadcasting.net/production/mp3/wkno/local-wkno-883117.mp3

01-27-2010: The Value of a Customer, by John Malmo.

Memphis, TN – Few businesses really understand how much a customer is worth. Malcolm Gladwell, author of The Tipping Point, figures that, for instance, an average AT&T or Verizon customer is worth at least a couple thousand dollars.

Gladwell asks, if every one of your customers were worth two-thousand dollars, how long would you keep her holding on the telephone? At the counter? At the cash register? Or with how many people for whom English is their second language would she have to speak in order to get help?

The greatest marketing guru of all time, Ted Levitt, said that the objective of business is to create a customer. Create and hold a customer; yet, too many business people act like they never get it. Oh, they nod their heads, but they don't act. Otherwise you and I wouldn't experience the kind of frustrations we do when we become customers.

Start spending some of that money you spend to attract new customers on retaining those customers that you already have. It's a better investment. Figure out what your average customer is worth. It might scare you.

John Malmo is a Memphis marketing consultant with more than fifty years experience. He is former chairman of Archer Malmo Advertising and specializes today in helping small businesses grow. To reach Mr. Malmo - or to buy a copy of his book When on the Mountain There is no Tiger, Monkey Is King - go to http://www.johnmalmo.com.

Correction: The Original Version of this commentary had Seth Godin listed as the author of THE TIPPING POINT. The actual author is Malcolm Gladwell.