If you look at an income statement the top line item is always revenue. Think about that for a moment. The first piece of information on an income statement is revenue. Why of all the information that could be on the income statement do we begin with revenue? Well the answer is quite simple…
Revenue is the engine that brings money into a business. Revenue is a very important number for a business owner. If you don’t have revenue, you don’t have any reason for being in business. In fact if you don’t have revenue for long enough you have to close your doors.
So let’s discuss the all important line item of revenue. Why do we get revenue? We get revenue because we are able to provide a good or service to a customer. In other words
Good/Service + Customer = Revenue
We have three variables good/service, customer, and revenue. Which one of these three variables is the most important?
Many would say that the revenue is the most important. Others would say that their good/service is the most important. If you guessed either of those items you would be WRONG!!
Yes, the customer is the most important component in the above equation. Why is the customer the most important you may ask? I’ll tell you why. The customer that you choose to serve determines everything that you do in your business.
Think about it. The customer you decide to sell to determines everything else that you do in your business. It determines what products/services you sell, the people you hire, the business investments that you make, the kind of offices that you have, the location of your business. All of these items are tied inextricably to the customer that you sell to.
If the customer is so IMPORTANT, than it naturally follows that getting a complete understanding of your customer will make the difference between success and failure in your business. What is it that you should know about your customer?
- What is it that your customer wants and desires?
- What are your customer’s pain points?
- What is your customer looking for from its merchant?
- What does your customer want tomorrow?
These are just some of the questions you should think about when you’re thinking about your customer. If you aren’t able to answer these questions with clarity now, it is time to spend some time researching these questions. The good thing is that a lot of times your customers will give you this information. All you have to do is ask. Let’s face it, your customers like you. If they didn’t like you, they wouldn’t buy from you. They like you because you provide them with what they want. Just think how much more they would like you if you provided them with more of what they want.