Jim Collins, author of the best seller Good to Great recently said: Great companies are distinguished by their relentless willingness to confront the brutal facts of reality.
So, what is the brutal reality, I found myself thinking? For the boat business it seems pretty clear. . . its very tough out there! At almost the same time, however, I also received an email from MarineMax promoting an upcoming event dubbed Ladies First. Its a two-part program including the Women On Water clinic followed by The Yachting Gourmet cooking seminar. Its scheduled this month for a Wednesday morning from 8 am to Noon.
The MarineMax promotion gave me the practical answer to the Collins statement, and it is this: The brutal reality is these are bad times. And it doesnt matter whether youre big like MarineMax or a small store in Iowa -- the pain is the same right now. But, a relentless willingness to confront it is what MarineMax is evidencing, and it highlights an important consideration for all.
In times like these, the majority of businesses will hunker down and ride it out by cutting or reducing everything possible including customer retention programs. But, another brutal reality is that, today, the #1 priority of every dealer must be the retention of existing customers. Sure, its true all businesses always compete for new customers whether the economy is good or bad. But, while good times favor acquiring new customers to grow, bad times underscore the highest priority is customer retention. After all, its far easier to keep a customer than find a new one. Its cheaper, too. For example, some customer research indicates it cost $19.00 to keep a current customer happy versus $118 to get a replacement. Moreover, there will never be a better sales prospect than a satisfied existing customer with whom there is an ongoing connection.
Its also important to recognize that existing customers can give us growth of we pursue them. Heres why: (1) Even in the worst economic downturn, retained customers will still be spending, likely about what they spent last year; (2) Some of those customers will still increase their spending; And (3) some customers will happily pay a premium for extra services or convenience if you give them a reason to!
I am not suggesting that some new customers could not be in the offing. Just as using events and programs to stay connected with existing customers should be a high goal, they can also be vehicles to grab some new customers. After all, in these times, if most of the other guys in your market area are hunkered down, increasing your market share could be up for grabs!
Former G.E. Chairman Jack Welch said it best: Deal with the world as it is, not how youd like it to be! Wed all like good things to just happen. . . but in todays world we must do things to make them happen.