Business is simple

Until you make it complicated.
Simple business looks like this:
1) happy customers
2) who regularly return
3) and tell their friends
3.a) who then also become happy customers
This is a virtuous cycle.
Which seems so easy to understand.
Except.
Damn near every business forgets steps 2, 3, and 3,a.
Getting a customer in the door is just the start.
You NEED the other steps to actually have a viable business.
Drug dealers get this and so does Netflix.
So do Zappos, Amazon, and Target.
Peter Drucker said “that which gets measured – gets improved”.
Many companies track marketing, sales, and initial conversions.
But do they track recurring sales – nope.
Ask who their top 10, 50, 1000 clients are – they have no idea.
Here’s why this matters so much – profit margin.
Returning customers cost about 1/8th what a new customer cost.
And – returning customers bring their friends ( for free ).
If you aren’t measuring ( and then enabling ) returning customers – your missing a huge opportunity.
Make it simple,  your customers will thank you ( and so will your CFO ).

Customer churn hurts

You don’t understand Amazon – and neither does anyone else.

What’s Amazon’s game?
What do they want to be when they grow up?
Have you heard Jeff mention it on any shareholder calls?

“No idea” is likely your answer.
Because no-one has ever admitted the truth of what Amazon’s end game is.
( I’ll tell you in a sec, have some patience )

Amazon is second only to China’s Alibaba in sales volume – and wants part of that market also.
They are willing to be patient and thoughtful and very strategic at acquiring customers.
Sometimes they make investments which everyone questions.
And Amazon regularly flirts with the zero profit line.
Their mission says: Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.
But what’s behind that mission statement?

It’s simple: Customer Lifetime Value

Amazon is 100% focused on Customer Lifetime Value.
They want as broad ( and deep ) a share of your spending as possible.
They want you to trust them – repeatedly.
They want you to think of them first when you want to purchase anything.
When clients look like subscribers ( predictable monthly spending ) they’ve won.
( what do you bet some analyst inside Amazon already has this figured out? )

Amazon is militant about stopping customer churn – Prime is their SuperGlue.

Amazon already has deep penetration in a broad range of markets.
With the acquisition of Whole Foods they now have food locked down.

How does your business think of customers?
Do you have Amazon’s focus?