There are many ways to improve your organization’s profits. You can cut costs. You can borrow money and invest it in growth. You can refine your processes.

All of these work. But, for most businesses, they are not the most powerful drivers of results.

For most businesses, the most lucrative sources of untapped latent profit are unleashed through the actions customers take. That’s my first fundamental law of marketing and sales: Customer Action is the Most Powerful Driver of Business Results.

Here are three real-life examples that show the power of customer action:

  • A luxury resort enjoyed strong customer loyalty, and many of these loyal guests referred their friends to the resort. However, guests were not referring nearly as many friends as they could. This resort identified the following customer actions that could improve their results:
    1. Guests tell their friends about the resort
    2. Guests invite friends to come with them on their next trip
    3. Guests encourage friends to go to the resort on their own

    Next, the resort’s marketing team focused on encouraging these actions. They created a referral program that gave loyal guests an easy way to talk about the resort, and also enabled them to give their friends a special discount on their first stay at the resort. The program was very successful, and became a key reason for the resort’s improved success.

  • A manufacturer of component parts for other manufacturers recognized that they had much better success if their customers called them to discuss new products under development.  By being brought in early to these discussions, they were able to offer advice and expertise that differentiated them from the competition. If they were brought in later, they usually had to submit bids and compete only on price. The company changed its sales approach to focus more on discussions of its customers’ business goals and long-term product strategies. Over time, customers came to see them differently, and they found themselves invited to many more product development discussions.
  • A fast, casual restaurant company, with many locations that enjoyed significant foot traffic, knew that customers who sampled its products were much more likely to buy. Therefore, they wanted to focus on encouraging customers to taste their products. A training program to teach employees how to get more customers to sample their products was very successful in generating this important customer action– and in generating better sales.

In each of these cases, the companies improved their results by identifying important customer actions and developing marketing and sales efforts to encourage those actions.

The formula is pretty simple: Identify customer actions that can drive your success, and focus your efforts on encouraging those actions.

Ask your team these two questions:

  • What customer actions will most drive your success?
  • Are our marketing and sales efforts focused on encouraging those actions?

If not, it’s time to recast your marketing and sales strategies. Focusing on encouraging important customer actions is a key step to driving your success.

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