Your business wants to sell more and more products or services. But, you cannot sell something that you want to sell! You can sell something that your customers want to buy and spend money for it. Many times entrepreneurs make a mistake when they sell something that they think that must sell. In this way, they don’t understand real needs of the customers and because of that they suffer from low number of customers and low income.
With this mistake of misunderstanding customer needs, there will be two different negative effect:
- Low number of satisfied customers and losing every unsatisfied customer.
- Your cash is invested in products and services that will stay on your stands or in inventory that cannot be sold.
If the customers cannot buy something that they want then they will become unsatisfied customers that will search for alternative of your business where can buy something that need. However, what is more important is that every new customer that will not satisfy their needs with your business will be loosed. This means that all your investments into the marketing to find new customers will be for nothing. Let’s see example. If you have 1000 current customers for month and your marketing campaign is good and bring every month 100 new customer. In a table below is given for the next 3 months the number of customers that you have with 30%, 20%, 10% and 0% customers with unsatisfied needs, respectively. Look the results into the table:
| 30,00% | 20,00% | 10,00% | 0,00% | |
| Number of Customers One Month Later | 770 | 880 | 990 | 1100 |
| Number of Customers Two Month Later | 609 | 784 | 981 | 1200 |
| Number of Customers Three Month Later | 496 | 707 | 972 | 1300 |
As you can see, with the 30%, 20% and 10% unsatisfied customers you will continuously lose the customers and this is negative butterfly effect. This means that you will constantly lose your business potential energy into the marketing and current customers. Every improvement from 30% to 10% will give you dramatically increasing of that energy. However, with 0% of unsatisfied customers you will have positive butterfly effect. (For more about positive and negative butterfly effect you can read in Business Butterfly Effect – The Basics.) In this case you will use the business potential energy into your marketing activities and also into current customers. That energy will be transformed into better income and profit for your business.
With second negative effect that comes when entrepreneurs don’t understand customer needs, they will lose business potential energy stored into the cash and into the products that they sell. First, your cash has very big potential energy for your business. Without cash, you will not can finance the basic business activities. Another thing is that your cash with great business potential energy will be stored into the products without business potential energy that you cannot sell. For example, you have cash that has great business potential energy. But, that potential energy must be transformed into potential energy of products or services that you sell. If you spend your cash into the product and services that not give added value to the customers they cannot be sold.
In the next post, you can read about steps that you must do to increase business potential energy with understanding the customers needs.
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