During my first job out of business school, a wise businessperson, Tony Hall, asked a group of us this question, “What is the most important thing for a successful business?”
- A great product
- Strong management
- Dedicated employees
- Customers
- Compelling advertising
- Good marketing
- A thoughtful business
- A unifying mission statement
Tony went around the table letting each of us provide an answer; no consensus was reached. Tony then emphatically told us in no uncertain terms that the most important thing for a successful business was CUSTOMERS.
Over the years, I’ve thought about Tony’s question and his answer. I’ve worked for large companies such as Pfizer & J&J as well as small companies and start-ups, and Tony was absolutely right. Customers are the most important part of any successful business. This is doubly true for the entrepreneur.
Sometimes, entrepreneurs mistakenly believe that anyone who provides capital (e.g. cash) is a customer. This includes Angel Investors, Venture Capitalists (VCs), customers (buyers), and end-consumers. Granted, Angel Investors and Venture Capitalists do provide capital along with advice. However, they provide capital at a huge premium – 30% to 70% of your company.
Within this hierarchy of “customers”, I would rate the actual person who makes the buying decision for your product or service as the most important part of a new venture. You should have a relationship with this person. Ask probing questions and listen for their needs and where they need assistance. When first working with your customers, be in listening and learning mode. Take what you learn and improve your product or service. If your product or service truly addresses the needs of the buyer, selling is easy. Ask them about the competition. Learn about pricing and terms. If possible, see if you can get a commitment to buy from this customer. With a group of committed customers, you may not need to go to Angel Investors or VCs for capital and you will retain the ownership of you company.
Once you learn about the real needs of the customer, the salvation and growth of your company depends on not only meeting the needs of the customer, but also continuing to delight the customer. A delight customer is your best advocate and evangelist. Furthermore, remember what W. Edward Deming said, “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.”
Tom McMillian is the president of Techtao, LLC a marketing consultancy.
This article was previously published in the New Jersey Entrepreneur magazine where Tom is recognized at New Jersey’s Marketing Expert
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