Small Business Customers Are Worth 20 Times More

The sheer numbers of the small business market – 25 million strong in the United States alone – are too alluring to resist.

Yet, sales individually to each small business customer can be relatively small.  A few thousand dollars in a year’s time, perhaps much less, may be the typical sales volume to a small business customer. 

That makes it a difficult sale for many vendors.  Vendors fail to see how they can make a profit selling to small businesses if one-on-one selling is attempted.  It’s no wonder that so many end up selling through channel partners or over the Internet.

But an article I ran across recently puts a sale in a different light. 

Jeffrey Gitomer, author of Customer Satisfaction is Worthless, Customer Loyalty is Priceless, says in a Biz Journal article that “the value of a customer is 20 times his annual sales volume. A $10,000-a-year customer has a value of $200,000. That’s what you earn if you keep him, that’s what to fail to earn if you lose him.”  (Read a summary of his book here, also covering the customer loyalty issue).

Viewed in this light, those small business customers may be worth a more direct and personal approach.