The One Surprising Metric That Most Loved Businesses Optimize For
Steal the homework of some of the most successful businesses in the world
What’s the most important aspect of any business in the world?
Simple question. No complications. No trickery.
What according to you is the most important metric that any business should aim for?
When any company manages to master this one metric, the growth of the business is almost guaranteed.
And yet, you know, what’s the most surprising aspect?
I’ve hardly ever seen any blog/ books newsletter/ social media post/ podcast episode/ video talk about this concept in simple words.
So, let me ask you again…
What according to you is the most important metric that any business should aim for?
Let me give you a hint.
This metric shows the focus of a business on growth, customer satisfaction, and obsession on building a genuine product.
Let me give you one more hint:
Think of some of the companies you are loyal to.
Any guesses?
Well, the answer is: “repeat purchase”
Think about this.
Would you ever go back and give business to any brand/ restaurant/ app where you’ve had a bad experience the first time around?
Also, look at the other side of the spectrum.
Think about a few brands who you tend to buy from on a regular basis.
How difficult is it going to be for a competitor to move your loyalty from a (current) brand of your choice?
Social media content creators are obsessed with trying to teach the audience how to maximize revenues and sales.
But think about this!
When was the last time you saw/ heard/ read something or someone who told you to put your energies towards customer acquisition, but your focus must always be towards creating an experience where the customer makes a repeat purchase from your brand?
Let’s understand the simple logic here.
It’s a lot more difficult to get a stranger to get introduced to your brand, understand what products/ services your business offers, evaluate their need/ want to buy your product, have a conversation with your sales team, get convinced and agree to make a purchase.
On the other hand, the moment you have a customer who’s already made a purchase from your business, 50% of your battle is won.
Now, it’s (anyway) your responsibility to deliver a product/ service/ experience to your customer that’s so good, that they get hooked to your brand the moment they start using your product.
Think about this; as a customer.
How much time does it take you to select and commit to a new TV/web series?
But imagine the delight of discovering a series and the first episode of the first season is so good, that you’re hooked and (binge) watch till the last frame of the series.
Humans are creatures of convenience.
We don’t like to make too many decisions.
So, the moment we find something that satisfies us the first time around, we find it easier to trust the same brand again.
Now, recreate this experience in your business.
Make it easy for a customer to make the first purchase through a trial, a free sample, a “new customer” offer and delight the customer in their first purchase experience.
Once the first transaction is closed and the customer has had a satisfactory experience, then, it’s your responsibility to build your relationship further with the customer and get them to make their next purchase when the time is right (would be different for every business).
The moment you have found a customer who’s trusted your business with 2 transactions, in most probabilities, you’ve won a customer for life.
That’s the long term impact of a repeat purchase.
What are your thoughts about this?
Do you agree with this thought process of the repeat purchase being the most important metric of a successful business?
Do you agree that it’s difficult for a new business to shift your loyalty from one brand to another, if you’ve been having a good experience with the brand of your choice?
Let’s continue this conversation (or ask your questions about the post) in the comments below.
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Prompt used to create the image for the note
P.S.: Image made on Meta AI using the prompt, “Imagine a corporate event where the best salesperson of the company is being awarded with a big trophy”