The key to self-perpetuating business

By TJ MacDonald |

Your market is your source of income. But how well do you manage it?

In a broad sense, a market as a body of existing or potential buyers for specific goods or services. In other words it is a group of people or other entities that possibly want to buy your product.

Every business has one or more markets with which it intends doing business. The individual members of the market are not necessarily customers or clients of your business. In fact, it is highly unlikely that they all will be at any one time. After all, how often do you hear of a business that can honestly claim to have 100% market share. Even in a monopoly situation where there are no direct competitors some members of your defined market may still be drifting to indirect competition. They may opt out of the solution you can provide, choosing instead to modify their need.

So “your market” is more a potentiality, rather than a reality. Just like Schroedeger’s cat, it requires your involvement to bring it (or, more likely, part of it) into your reality.

So, what is that reality? It’s not just black or white, positive/negative, they’re a customer or they’re not. It’s more like a continuum. From a misty cloud of possibility to non-stop, full-steam-ahead business growth with hordes of helpers stoking the boilers. Let’s take a look at that continuum.

Many people see the market as a dichotomy — a sort of commercial Yin and Yang where, if you are not a customer, you are a potential customer. And all “potential” customers are known as “prospects”.

Prospects –> Customers.

However, in more sophisticated eyes, prospects or prospective customers aren’t rated as such until they have been singled out from the herd and “qualified” as possessing the pre-requisites of a buyer. Until then, they are just “suspects”. We suspect they may be a prospective customer but have yet to determine their needs, how our solution will help and whether they would be interested in a matchup. So we now have:

Suspects –> Prospects –> Customers.

Some marketers then differentiate between customers and repeat customers. I like the thinking of marketing maestro Jay Abraham, who uses the term “clients” - and not just for that narrowband of professional services providers. Abraham’s reasoning is that all businesses should be developing “clients” towards whom one has a fiducial responsibility (i.e. based on trust). It’s then a measure of an ongoing business relationship, not merely one derived from casual passing trade.

And “passing trade” is definitely something customers can become. Businesses that allow the commoditisation of their products and services, for example, are especially vulnerable. Constant selling and reselling is needed as buyers move from prospect to customer, then uncommittedly drop back into the pool of prospects again until they rise to the next baited hook.

Regrettably, old school sales tactics encourages this and breeds a growing band of buyers who hate being sold. They have learnt to be wary — and respond to each new transaction armed with (or tainted by) their prior experiences.

If they were to learn something positive from a transaction the chance of repeat business has increased. Learn something bad though, and the next sale is blown out of the water. Or at least sinking — and you have an awful lot of bailing to do.

The difference between a customer and client is therefore a learning experience. The latter has learnt the value you provide, and learnt the trust needed to place their ongoing needs in your care.

They are no longer merely a “repeat” customer (as measured only by past activity), but have become an Expected ongoing business relationship. And that, in business development, is eminently more valuable than mere history.

Suspect –> prospect –> customer –> client

The advantage of clients over customers is that they tend to come to you, and possibly you alone, to attend to their needs. (cf. customers shop around.)

The next stage of our business relationship continuum is even more powerful - and rewarding. It is the key to self-perpetuating business.

Are your clients becoming advocates? Do they actively promote you and your offerings to other members of your market? If so, you have the good fortune of having your own personal team of evangelists out there, spreading the good word for you.

That, without doubt, is an highly effective way of getting to all those many, many members of your market, who through simple ignorance, through no fault of theirs or of yours, have not yet emerged from the big fuzzy cloud of potentiality to be recognized even as a suspect.

Suspect –> prospect –> customer –> client –> Advocate

I have mentioned that progression along this continuum is based on learning experiences. More specifically, it is based on what all these different participants in your marketplace learn about you, your products and services, and the way you do things, in comparison with everything else they are learning in the same context. Including about your competitors.

Your contribution to their learning has to be on the “good” side (from your perspective.) - the weighted side of the scales. Allow imbalance to tip the scales the other way, and you will quickly discover there is no justice in an ignorant market.