Advice: Treat Customer Relationships as Perishables
Customer relationships are like fruits and vegetables in a grocery store. They are valuable only if the store has lights, air conditioning, heating, and workers to maintain their appearance. Their value can evaporate very quickly if the business fails to maintain the necessary conditions. It is of paramount importance to guard customers from the financial problems affecting the business. The protective seal around customer relationships is the trust and confidence they place in a supplier. That seal is often less resilient than many owners believe (one reason for not hitting revenue projections). Once that seal of trust and confidence is broken with one or two major customers, the proverbial “rotten apple” has begun to spoil the whole bunch and the damage can be hard to contain.
This is relevant because deterioration of customer relationships reduces the value of the business based on the premise that customer relationships are what drives value beyond the underlying hard assets such as a building and manufacturing equipment.
Once the mental construct takes hold to treat customer relationships as perishables, it makes it easier to accept the need for faster and more decisive action to preserve their value regardless of how unpleasant it may be to do so.