Every business owner we speak to has their own unique story for how and why they started their business. Some people always wanted to be their own boss, others had a passion that they turned into a dream job, and others always knew and pictured themselves running their own businesses.
Since 2006, we have been working with businesses owners who provide services and in that time, we have learned that these service-based businesses have a unique set of concerns and goals—as unique as the reason they started working for themselves in the first place. Their goals range from growing their local brand awareness to opening up a new location, to taking a side hustle making it their full-time gig. One thing is consistent among them, though, service-based businesses rely on building and strengthening relationships with their customers. They count on their customer relationships for word-of-mouth recommendations for feedback on their services and for repeat or recurring business opportunities that help them sustain their business. Knowing how important customer relationships are, how do you strategically and thoughtfully nurture this key component to success?
You can measure a lot of things, but how do you measure relationships? A number of customer relationship management (CRM) tools are available out there to help. This article from Business News Daily highlights three but also lists a ton of others. Additionally, PaySimple includes a mini-CRM as part of our suite of features which enables our customers to connect payment information to their customer’s account. We built our system this way because relationship management is so important to our customers and core to the effectiveness of any service-commerce solution.
What are your long-term goals?
A CRM might answer, “how do I measure?” but it doesn’t quite address “what should I measure?”
In the way that all business owners are unique, so are their definitions of success. One business owner might want to expand to multiple locations or even globally one day. Another business owner might want to remain an army of one but take their business to a place where they have more personal time and enough recurring business that they only have to spend a very small amount of time on acquiring customers. Another might dream of building a local business that is a staple in their community for years to come. No matter your goals, knowing what success looks like for you as a business owner or where you are trying to end up, will help you better prioritize and manage your customer relationships.
Focus on three metrics that support your long-term goals
Why measure your customer relationships?
- Understand what types of customers provide the most value to your business
- Market and advertise to the right (best future customer) people when acquiring new customers
- Keep your current customers happy and connected
At Accelerate Your Business, a recent Entrepreneur.com event in Denver, Colorado, a panel of C-level startup leaders were asked, “What three metrics apply to all (or most) businesses.”
Promise Phelon, CEO from TapInfluence, gave a really tangible answer, particularly when thinking about relationship-based businesses.
She named these three:
- Gross margin
- Cost of acquisition
- Lifetime value of customer
These are great place to start and you’ll likely be able to collect a decent amount of this data from your current database. Whether you use these metrics or others, the three things you decide to gauge your business’ success against should become core to your growth planning. Make sure that the foundation you set today, is one that you can sustain and build upon as you grow. Set your foundation for success, pin down your metrics and then chase them down with ruthless focus.
Learn how PaySimple brings simplicity and flow to the lives of service-based business owners: