How to Maximise the Value of your Business – Part 1 – Customers
For the majority of businesses it is the power of the customer relationships that provides most of the value.
Whilst Facebook recently announced that they are to acquire social networking company Instagram – a business which is less than 2 years old and that has never made a profit – for c$1bn, there are few technology businesses that can be valued on potential alone. Arguably, one of the reasons for the acquisition is Instagram’s 30 million customers.
For most businesses the customer relationships are the first thing to come under scrutiny. So what are buyers looking for, and equally important, how can you provide evidence?
Most businesses we speak to are confident that they have very good relationships with their customers, but very few can prove it. How might you approach this?
One piece of evidence is customer longevity, and here the data is almost always available. Another element is measurement of service levels. Ideally the business will have a mixture of qualitative and quantitative data – happy customers should be prepared to say so. You might for instance be able to demonstrate customer referrals.
All this requires data, and not just for the current period. To have impact, the trends need to be recorded, so we can prove customer satisfaction is actually improving.
If you fail to provide sufficient evidence, don’t be surprised when the buyer insists on meeting some of your key customers!