Measuring client growth.

Posted: May 22, 2013 in Up-and-running Business

It happens a lot but many businesses in the service sector take a myopic view of their client count. The business owner may have a goal  of adding 10 new customers in a 6 month period. The acid test is easy: “.. is that gross or net?” Probably the former.

The key measurement metric is the net impact on client growth. I know of one small business that adds about 15-20 new customers a year but loses nearly as many. It is important to perform exit interviews on the clients who leave. Why did they leave? Did their departure involve service issues? It is important to document the clients who leave and create a list of reasons.  The main reason for their departure might be that there was no apparent value in the service that was being offered.

Businesses that chase sales will continue to chase sales. The apparent rationale is that more clients equate to more sales and more sales mean more profits. A business with a high employee turnover is not a great place to work in and certainly not a great place to foster team building and morale. Similarly, a business that chases clients without being able to retain them will go nowhere.


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