Why do some companies continue to grow at unparalleled rates while other companies seemingly fight year after year just to maintain their revenue rate?
In some cases, why did a company grow for many years and then hit what seems like an unbreakable plateau? Some will attempt to say it is one thing or another. Happy employees, better processes, new information systems or greater innovation.
All true, perhaps.
After more than a decade in small and medium size companies I have identified another reason companies can't grow beyond their sticking point. I refer to it as “Customer Swapping.” A simple, yet unsuspecting growth killer that stunts the growth of businesses every day.
Out with the Old, In with the New
Customer Swapping is the self-serving act in which a business in search of growth moves beyond its current customers in search of new ones. The difference between swapping and addition is the movement to new customers prior to making sure the current customer is satisfied.
Every business understands the need to find the next customer, but too many businesses don't understand the risk of searching for the next customer before securing their current ones. What is worse is that the cost to the business is mind-blowing and often business leaders don't see it.
Sure we lost a few customers, but we gained a few new ones as well, our revenue year over year was +/- Flat.”
Which basically means you worked your butt off to gain a new customer to make up for the business you lost.
Rethinking the Math
What if you didn't lose that customer? You focused on satisfying their needs prior to moving on to the next customer? You kept the old customer and acquired the new one(s)?
Unless your business is a one-time sale type of operation, the growth of your revenue comes from aggregation. You achieve the growth you seek when the customers you earn become customers for life (relatively speaking) and the next customer becomes “In addition to” the current ones. The investment in time, energy and people that it takes to replace the last customer is more than just revenue replacement.
It is exhausting to keep finding the “next customer” when the sole purpose is to replace the last one. Growth is the byproduct of doing right by every customer, not just the next one. Focus on the customers you have right now, then add.
No swapping, unless of course you are one that believes flat is the new up -- which by the way, it isn't.
Title image courtesy of Tripplex (Shutterstock)