The Purpose of a Business is To Get and Keep a Customer at a Profit

This was stated by Ted Levitt in his book The Marketing Imagination. I would recommend this book, it contains a lot of wisdom about marketing. It is one of the few management books I have read multiple times. Read my review of the book here.

For a small business, this statement offers several key lessons:

1. Customer-Centric Focus

• Lesson: The primary goal of a business should be to attract and retain customers. Small businesses should prioritize understanding their customers’ needs, preferences, and pain points.
• Application: Invest time in market research, gather customer feedback, and tailor products or services to meet customer demands. Building strong relationships with customers can lead to repeat business and referrals.

2. Profitability as a Priority

• Lesson: While attracting and keeping customers is crucial, it must be done profitably. A business cannot sustain itself if it is not generating a profit.
• Application: Small businesses should carefully manage costs, price their products or services appropriately, and ensure that their customer acquisition and retention strategies are cost-effective. Avoid overextending resources in pursuit of growth without a clear path to profitability.

3. Long-Term Customer Retention

• Lesson: Keeping customers is just as important as acquiring them. Loyal customers are more likely to make repeat purchases and recommend the business to others.
• Application: Implement strategies to enhance customer satisfaction and loyalty, such as excellent customer service, loyalty programs, and consistent quality. Focus on building a strong brand that resonates with your target audience.

4. Value Creation

• Lesson: To get and keep customers, a business must offer value that meets or exceeds customer expectations.
• Application: Small businesses should focus on creating unique value propositions that differentiate them from competitors. This could be through superior product quality, exceptional service, or innovative solutions to customer problems.

5. Adaptability and Responsiveness

• Lesson: Markets and customer needs are constantly evolving. A business must be adaptable and responsive to changes to maintain its customer base.
• Application: Stay attuned to market trends, customer feedback, and competitive dynamics. Be willing to pivot or adjust your offerings to stay relevant and meet changing customer needs.

6. Efficient Marketing and Sales Strategies

• Lesson: Getting customers requires effective marketing and sales efforts that reach the right audience with the right message.
• Application: Small businesses should focus on targeted marketing strategies that maximize ROI. Utilize digital marketing, social media, and other cost-effective channels to reach potential customers. Ensure that your sales process is streamlined and customer-friendly.

7. Customer Experience Matters

• Lesson: The overall experience a customer has with your business can determine whether they stay or leave.
• Application: Pay attention to every touchpoint in the customer journey, from the first interaction to post-purchase support. Ensure that each interaction is positive and reinforces the customer’s decision to choose your business.

8. Measure and Analyze Performance

• Lesson: To ensure that you are effectively getting and keeping customers at a profit, you need to measure and analyze key performance metrics.
• Application: Track metrics such as customer acquisition cost (CAC), customer lifetime value (CLV), retention rates, and profit margins. Use this data to make informed decisions and optimize your strategies.

9. Build a Strong Reputation

• Lesson: A good reputation can help attract and retain customers, while a poor one can drive them away.
• Application: Focus on building a strong brand reputation through consistent quality, ethical practices, and positive customer experiences. Encourage satisfied customers to leave reviews and testimonials.

10. Continuous Improvement

• Lesson: The business environment is dynamic, and continuous improvement is necessary to stay competitive.
• Application: Regularly assess your business processes, products, and services. Seek ways to improve efficiency, enhance customer satisfaction, and innovate to stay ahead of competitors.

By internalizing these lessons, a small business can align its strategies with Levitt’s principle, ensuring that it not only attracts customers but also retains them profitably, leading to sustainable growth and success.

Based on these lessons, here is a sample 5 year, 1 year, 6 monthly, 3 monthly, monthly, weekly and daily checklist based on getting and keeping customers at a profit.

Develop your own checklists, and keep them updated. This approach is very similar to the Rockefeller Habits, that I will cover in another post.

5-Year Checklist

1. Set Long-Term Vision and Goals:
   • Define where you want the business to be in 5 years (e.g., market share, revenue, customer base).
2. Build a Strong Brand Identity:
   • Develop a recognizable and trusted brand that resonates with your target audience.
3. Expand Customer Base:
   • Identify new markets, customer segments, or geographic areas to expand into.
4. Invest in Scalable Systems:
   • Implement scalable technology, processes, and infrastructure to support growth.
5. Cultivate Customer Loyalty:
   • Build long-term relationships with customers through loyalty programs and exceptional service.
6. Monitor Industry Trends:
   • Stay ahead of industry shifts and adapt your business model to remain competitive.

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1-Year Checklist

1. Set Annual Goals:
   • Define clear objectives for customer acquisition, retention, and profitability.
2. Develop a Marketing Plan:
   • Create a detailed plan for attracting and retaining customers (e.g., campaigns, channels).
3. Improve Customer Experience:
   • Identify and implement ways to enhance the customer journey and satisfaction.
4. Review Financial Health:
   • Analyze profitability, cash flow, and expenses. Adjust pricing or cost structures as needed.
5. Launch New Products/Services:
   • Innovate and introduce offerings that meet evolving customer needs.
6. Build Partnerships:
   • Establish strategic partnerships to expand reach and credibility.

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6-Month Checklist

1. Evaluate Progress Toward Annual Goals:
   • Assess whether you’re on track to meet your 1-year goals. Adjust strategies if necessary.
2. Conduct Customer Feedback Analysis:
   • Gather and analyze customer feedback to identify areas for improvement.
3. Review Marketing Performance:
   • Assess the ROI of marketing campaigns and refine strategies for the next 6 months.
4. Train and Develop Team:
   • Invest in training to improve customer service, sales, and operational efficiency.
5. Optimize Operations:
   • Identify and streamline inefficient processes to reduce costs and improve customer delivery.
6. Plan for Seasonal Trends:
   • Prepare for upcoming seasonal demands or opportunities (e.g., holidays, peak seasons).

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3-Month Checklist

1. Revisit Financial Targets:
   • Review profitability, revenue, and expenses. Adjust budgets or strategies as needed.
2. Update Customer Retention Strategies:
   • Implement new tactics to improve retention (e.g., loyalty programs, personalized offers).
3. Launch Short-Term Campaigns:
   • Run targeted campaigns to boost sales or engagement (e.g., promotions, events).
4. Analyze Competitor Activity:
   • Study competitors’ strategies and identify opportunities to differentiate.
5. Review Team Performance:
   • Evaluate individual and team performance. Provide feedback and set new objectives.
6. Plan for Upcoming Quarters:
   • Set goals and action plans for the next 3 months.

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Monthly Checklist

1. Review Financial Performance:
   • Analyze profit margins, revenue, and expenses. Track CAC and CLV.
2. Evaluate Customer Retention Metrics:
   • Check retention rates, churn rates, and repeat purchase rates.
3. Conduct Market Research:
   • Stay updated on industry trends and gather customer feedback.
4. Assess Marketing Campaigns:
   • Review ROI, engagement, and conversions. Plan adjustments for the next month.
5. Review Customer Experience:
   • Evaluate customer service interactions and resolve recurring issues.
6. Set Monthly Goals:
   • Define targets for customer acquisition, retention, and profitability.

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Weekly Checklist

1. Monitor Sales and Customer Acquisition:
   • Track new customer acquisitions and sales performance. Identify top-performing channels.
2. Engage with Customers:
   • Respond to inquiries, reviews, and feedback. Reach out to at-risk or inactive customers.
3. Review Marketing and Advertising:
   • Check campaign performance. Adjust ad spend or messaging based on weekly results.
4. Analyze Operational Efficiency:
   • Review processes for cost-effectiveness and customer-friendliness. Address inefficiencies.
5. Team Check-In:
   • Meet with the team to discuss progress toward monthly goals. Address challenges.
6. Plan Promotions or Outreach:
   • Schedule social media posts, email campaigns, or special offers. Plan outreach to leads.

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Daily Checklist

1. Track Key Metrics:
   • Monitor daily sales, customer inquiries, and website traffic. Check for sudden changes.
2. Engage on Social Media:
   • Respond to comments, messages, and mentions. Share valuable content.
3. Deliver Excellent Customer Service:
   • Address complaints or issues promptly. Ensure every interaction is positive.
4. Follow Up with Leads:
   • Reach out to potential customers who showed interest. Nurture leads with personalized communication.
5. Review Daily Operations:
   • Ensure products/services are delivered on time and meet quality standards.
6. Stay Customer-Focused:
   • Ask: “What did I do today to attract or retain a customer?” Look for small improvements.

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Key Notes:

• Consistency: Regularly review and update these checklists to stay aligned with business goals.
• Adaptability: Be flexible and adjust strategies based on performance and market changes.
• Tools: Use CRM software, analytics tools, and project management apps to streamline execution.

This list format provides a clear, actionable roadmap for small businesses to focus on getting and keeping customers profitably over the short, medium, and long term.