Who is your Most Favored Customer (MFC)? What is his/her value to your business?
When you do business with large clients (e.g. governments), they will often have you certify that they are the MFC. The definition they use is that no other customer will get more favorable terms, conditions and prices then they are being offered. You violate this at your own risk.
However, if your client purchases your products or services with some regularity they provide you with a cash flow your business needs. Another client may be a first time or irregular purchaser. Which one is the MFC? Which one do you offer something special?
Some businesses believe they should provide the “special deals” to the first time purchaser under the assumption that they may become “a regular”. So it is the “regular” that pays a penalty. It is the “regular” that may move to the competition where he/she gets the deal of a new client. If the new client becomes a “regular” he gives up the benefits.
The business therefore must incur the time and cost needed to replace the regulars that leave just to keep even. Hopefully you know how much that is for your business.
What would it have cost to keep the “regulars”?
So, who should be the MFC?
Steve Koenig, SCORE Counselor
Visit us at: www.scoresouthflorida.net