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How Does Having a "Sticky Customer" Increase the Value of Your Business?

What makes your customer relationships "Sticky"?

Sticky Customer Relationships

Posted by David Humphrey on 21 April 2016 | Comments

Why does a customer engage in commerce with you? Seriously, you have competition. Why did they choose your business the first time and what brings them back time and time again? What makes your relationship with them “sticky”?

In the early 1900s three entrepreneurs radically changed how business was conducted. The Wright Brothers airplane made the world smaller; Henry Ford’s assembly line made cars and other products, which, adapted to this manufacturing process, became more affordable; and King C. Gillette designed a razor to be disposable. Gillette’s concept was that profit was not in the initial product sale, but in the subsequent sales of necessary unique replacement blades, which fit his razor handle. This novel approach to business has now permeated healthcare, how we brew coffee and buy service and replacement parts for our cars. Mr. Gillette mastered “sticky”.

Obviously, being only one of a few suppliers of a replacement consumable is a great indication of a longer-term relationship, but sticky goes beyond just this obvious example.

Having customers’ past orders and credit card number automated to make the reorder process simple is a great way of improving the customer experience and having a feature (past data) that nobody else can offer the customer. It makes the process of switching more difficult and painful for the customer. Another way to enhance the customer experience is same day delivery or quicker shipping times.

 Often there are company-specific aspects that brought the customer to the door originally: an expertise, a piece of equipment, a skilled designer or craftsman that now the customer trusts and cannot live without. When speaking with investors, making them aware of these sticky situations adds value to your presentation.

Another way of creating “sticky” is flexibility. In a world of minimum order quantities, being flexible can make you valuable and a true partner, not just a vendor. Your willingness to stock customer specific product (known as Kanban from the Japanese just-in-time manufacturing philosophy) in case of increased demand, adjust shipping dates on purchase orders or provide additional services such as product assembly where other vendors ship product to you for sub-assembly makes switching more difficult and your relationship with the customer stickier.

Lastly, do you have security clearances, licenses or certifications competitors do not that makes doing business with you easier than dealing with new vendors?

 Each of these items helps create a relationship with the customer that is much deeper than “lowest price” or “we are good friends.” Businesses that only compete on price are rarely interesting to buyers. Businesses that service a niche and have a way to retain customers are often highly desired by buyers and receive better offers.


If you are interested in learning other ways to increase the value of your business, The Art Of Business Value Enhancement is a Must-Read!  Click here for more information.