How Your Existing Customers Are the Key to Business Growth
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Have you ever heard the phrase: “The customer is always right — even when they’re wrong?” As a business owner, this can be one of the hardest concepts to grasp — because it means you may have to maneuver through some tricky situations in order to make your customers happy.

Recently, I was flying home on a business trip on an airline where I have elite loyalty status. I missed the first leg of my flight on a basic economy, non-refundable, non-changeable ticket — through no fault of the airline. However, the gate agent rebooked me on the next flight without even blinking. I ultimately made it home. Not as lucky, however, were the non-elite couple who had been sitting in the airport all day, who had missed their first connection due to a weather delay, and who were now stuck on the standby list until the next day — because I was given the last seat on the plane they needed to get home.

As I was walking on the plane, I heard the couple asking why they didn’t get a seat and I did. I heard the gate agent’s calm reply, “She is one of our most loyal flyers.”

From the airline’s perspective, they made the right call: I’m a repeat customer. They can predict that I will give them a reliable amount of travel per year, and they don’t want to give me any reason to change that. Additionally, simply having the knowledge that loyalty to the airline gives privileges may inform the future booking behavior of the couple.

For small businesses, your plan of attack should be in alternating between attracting new customers and retaining existing customers. Here’s how to understand where to focus:

Watch for churn.

No matter what type of business you have, you need to know your churn rate. For e-commerce, the average churn rate you can expect (people buying once and not coming back) can be as high as 80 percent.

Additionally, if you’re selling anything–airfare included–63 percent of people will never revisit your store after purchasing from you, even to buy the same thing a second time. This has to do with the ubiquity of price aggregators for every type of item search online.

In other words, acquiring a repeat customer is super hard.

Listen–and respond.

Have you ever tried to reach a company that has failed you in some way and not find their contact information? You’re not alone.

Too many companies have no email, chat, phone, social, or another form of contact listed– and when you need them, that is telling. Conversely, if they do have those things listed and don’t respond to any, that’s just as bad.

In order to ensure you can retain the customers you do have, make sure you’re responding to their feedback — whether you agree or disagree.

Whatever’s wrong, make it right.

Remember that bit about the customer always being right? That’s key.

Once, I stood in line behind a woman in a mom-and-pop grocery store customer service line. She had a garbage bag, and when it was her turn at the counter, opened up to show a turkey carcass. Just the bones. She explained, in a strong, clear voice, “This was the worst turkey I’ve ever had.” The manager took her receipt and refunded her immediately, no questions asked.

By ensuring that her issue was resolved, they cemented her as a loyal customer. And that receipt? It had over $400 of groceries on it — of which the turkey was only $25.

When you’re just starting, there’s no way around it — you have to do the work of building a customer base. However, after you have that initial bump, understanding the real value of keeping your existing customers and how to do so is much more important.

Mar 27, 2019
How Everlywell's Julia Cheek Makes Big Decisions Quickly

When Julia Cheek founded Everlywell in June 2015, she was, by her own estimation, “perhaps the least qualified person to start a health care startup.” And yet, as her Austin-basedat-home lab testing companyapproaches its fifth anniversary, she finds herself overseeing a staff of about 100 people, providing home tests for allergies, food sensitivities, thyroid conditions, and, as of May 2020, Covid-19. The company raised $50 million in its last round of funding and was listed at No. 3 on the Inc. 5000 regional ranking for Texas this year.

In anInc. Real Talk: Business Rebootlivestream, Cheek, 36, spoke withInc. editor-at-large Tom Foster and took questions from viewers.Their conversation ranged fromhelping her team cope with quarantine to making big decisions. Here are some highlights.

Think Big and Think Fast

In May, Cheek and her board decided to give away $1 million to labs across the help them develop a working test for Covid-19. For a startup still counting every dime, it wasn’t an easy check to write.However, Cheek saysthey made the decision quickly. “It took about an hour,” she says. “It was one of the fastest and easiest decisions made in the history of the company.”

She knew that funding those labs would speed up development of an at-hometest. She also had to make decisions internally to offset that cost while doing everything possible to maintain head count. That meant scaling back every discretionary dollar her team could find–Goodbye, office coffee!–in order to do the right thing and keepher team. “I wanted to protect as many jobs as possible,” she says.

“It was the right decisionmade at the right time,” she says now. A month later, she’s hiring.

Look Out for Your People

When asked how she deals with the challenges of running a companyfrom home (with a new baby) as well as whilewitnessing the protests in the streets, Cheek was quick to stress the importance ofmakingsure her colleagues are able to cope. “I worry like a mom about every one of our team members,” she says. That means asking herself how her team is doing all the time and asking herselfhow she can make their days better. Sometimes that means encouraging them to disconnect from Zoom or other digital platforms and take care of themselves. “Our primary focus is: What does every employee need for their mental health?” she says.

As for her own self care, she’sbeen developingwellness routines, including taking many meetings while walking and doing her best to separate her home workspace from the rest of her house.

The Funding Challenge

Cheek spoke at length about the difficulties she encountered while seeking funding as a female founder, despite the fact that she went to Harvard Business School and had a strong network.

“It was hard for me,” she says. “So you can imagine how hard it is for people of color, especiallywomen of color. I heard a lot of noes. What I learned is that it only takes one yes.” Among those yeseswas one on-air boost from Shark Tank‘s Lori Greiner, which doubled Everlywell’s sales overnight.

Ultimately, Cheek says, people needto talk about funding obstaclesopenly and honestly and encourage entrepreneursand investors to confront theirbiases. “It’s important that founders hear stories and become part of the solution,” she says.


Jun 4, 2020

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