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🤗 Understand your customers and deliver exceptional service
The winning strategy to maximizing LTV
Is the idea of having a customer for life just a myth? In some cases, yes.
Strong Take: Prioritizing the delivery of exceptional service to your customers remains an unwavering strategy for success.
In today's world, particularly within the tech industry and beyond, there's a prevalent emphasis on growth hacks. You'll come across growth teams, growth marketers, growth product managers, all seemingly dedicated to one thing: maximizing conversion rates and optimizing funnel performance. In simpler terms, it often boils down to persuading people into using a service, sometimes at the expense of their long-term satisfaction.
In contrast, the residential real estate sector often fixates on the concept of winning customers for life (that’s long term thinking!). This involves developing and managing properties across a wide array of categories such as student housing, single-family homes, multifamily units, and senior housing, among others. But herein lies a significant oversight—the average individual seeks an affordable and comfortable place to call home, complete with amenities that cater to their needs, and situated in a location that suits their lifestyle. They are less concerned with whether the property is managed by Corporation X; what truly matters is that it aligns with their preferences and requirements.
Both of these approaches miss the forest for the trees. They fail to see the bigger picture. Maximizing conversion rates, diversifying across various property types in the hopes of capturing every conceivable renter for eternity, and upselling once in a while may boost short-term metrics. However, what these strategies often overlook is the fundamental question of who the customer is, what they truly desire, and how to deliver a service that consistently meets their expectations.
Our portfolio company, SmartRoof, has an opportunity to win customers for life by providing exceptional service to a fragmented industry. But that is just it, they are providing exceptional service in their core competency first. Repeat business comes second.
In the quest for business success, the myth of the customer for life reveals itself as more of a nuanced reality. While it's essential to prioritize the delivery of exceptional service, it's equally crucial to strike a balance between short-term gains and long-term customer relationships.
The tech industry's obsession with growth hacks and the real estate sector's pursuit of diverse property portfolios both have their merits. However, these strategies must not lose sight of the most critical element—the customer. It's not about tricking people into using a service or managing every conceivable asset; it's about understanding who the customer is, what they truly value, and how to provide a service that aligns with their needs.
In the end, the customer for life isn't a mythical creature; it's a real possibility when businesses invest in creating genuine connections, delivering value, and focusing on long-term satisfaction. By embracing this approach, companies can transcend short-term metrics and build a foundation for sustainable success that stands the test of time. In the ever-evolving landscape of business, it's not just about winning customers; it's about keeping them delighted, ensuring they choose to stay with you for the long haul.