Monday, October 19, 2009

The Power of the Customer

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
Sam Walton (1918–1992) American retailer founder of Wal-Mart

As customers we have power we forget about and don't exercise often enough. Wal-Mart is a great example. Many people don't feel right about the fact that American workers don't have adequate health care, yet the largest purchaser of health care in America, Wal-Mart does little to challenge the problem. In addition, we struggle with wages that don't meet the minimum living expenses but turn a blind eye at the exorbitant profits Wal-Mart posts.

Let's fire them.

I'm not afraid of a fair negotiation. Going for the cheapest price and leveraging your vendors has a long-term ripple affect. I was recently at a meeting for small business owners. We were discussing the lack of available financing and how it was affecting our growth. One man who once owned a $25 million company with no debt bragged "I financed my business on the backs of my vendors."

Yuck. He entered into business relationships with no intention of paying within terms. Stretching out his payments for 90 and 120 days. Vendors who wanted business and trusted him fell for it and he was able to grow a profitable business.

He asked for my card. He's starting a new venture and needs sales support. There's no need for him to call me. I'm not financing anyone's business and he's not the kind of guy I want to do business with.

Trust is key in mutually beneficial business relationships. Customers like him would ruin FullCircle Management.

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