This is simple customer math: Incoming Customers minus Outgoing Customers = Net Growth or Loss.
Managing customers as assets is about building passion across the organization and establishing a simple rallying cry for leaders.
Rather than talking about customer retention, begin each meeting stating the numbers:
- Incoming customers
- Outgoing customers
- Net growth (or loss) of customer asset in the selected period (Incoming Customers minus Outgoing Customers = Net Growth or Loss)
- Customers who recommended you
- Top five reasons why customers left
For many companies, every silo has varying definitions of “incoming customer,” so putting together these simple articulations requires alignment in definition and data.
Customer math is essentially the outcome of the experience you are delivering to customers.
I call it “customers vote with their feet” on whether they stay or leave. I find it powerful to begin meetings with this simple report card of “earning the right” to customer growth.
At one client company, we wanted a visual to depict the outcome of the customer math each month or quarter — so we came up with a pretty unique idea with marbles. We determined the mathematical equation for the number of customers a single marble would represent.
We began every meeting with two bowls of marbles:
- one bowl of marbles represented the lost customers
- one bowl of marbles represented the new customers
It got people’s attention when the bowls were even, or when the “lost” customers exceed the “new” customers.
Decide if this type of talk track for beginning key meetings and giving leaders something to be passionate about regarding customers will help your company. Then determine your version of this simple metric…and how to translate and communicate it across your organization – in your own unique style.
Download the new Customers as Assets Tool with three new metrics:
- Increase/Decrease Share of Wallet
- Recency/Frequency of Purchasing
- Decrease in Cost to Serve Customers