Sharing Daily Discoveries About Personal Finance And Business Topics

Recognizing A Loss of Money To Generate Customer Loyalty

I was reading about this business where one of its strategies for growth was to openly allow its customers to look into its basic operating expenses and how much money they actually make per sale. This is a small mom and pop type of business and so obviously it relies more on establishing a loyal customer base. Apparently, this works well for them where many times people buy more as they want to see them make a profit to stay in business.

In many ways I guess that can be true where if you are a smaller business people usually tend to root for you in comparison to a large corporation. Example, for large companies people usually feel better about businesses losing money as it makes one feel like they are somehow getting a better deal that way. I remember one specific incident that was kind of along this line in terms of generating loyalty.

Essentially, I was reselling a third party service and one person decided to not pay. Therefore, I had to cut the service off. Of course, I still had to pay the provider. However, the provider I was using usually wants to know some comments on why the accounts were being closed. I simply stated that the person I resold it to didn’t pay his bill. Interesting thing? The company decided not to bill me for it either as a result. In that case I knew that they clearly lost money when they didn’t have to and ever since then I have been a loyal customer.

Of course it can be dangerous to release too much information. But in many ways if people know a little bit about your business financially while recognizing the struggles you go through it can be a good way to generate loyalty. It shoes that there are real people running the show, so to speak.

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