??? 05/26/10 12:23 Read: times |
#176190 - Services != products != commodity products... Responding to: ???'s previous message |
When you work as consultant and do a one-off job for a customer, you will have to charge enough for that job to make sure you make a profit.
But if you sell a product, each and every customer may be satisfied. But you may still need to sell 1000 units to reach the break-even where you are starting to make a profit. Having your total customer base buy 800 units means you make a loss. Having your customers buy 1000 units means you end up at +/-0. This means that there are many situations where it isn't meaningful to even try to create a product because a market analysis shows that there just isn't enough customers to cover the initial startup costs. So, customer satisfaction is not enough to guarantee a profit. It is just an important factor to include in the calculations. Producing nails, you have a low investment cost so you don't need much customer satisfaction to manage to sell enough nails to recover your startup costs. Having satisfied customers can allow you to grow your business at a faster pace, but the problem then is how you are expected to make your customers so satisfied that they will chose your commodity products instead of someone elses. So your book has to be adjusted to take into account of you sell services or products, and if you sell commodity products or specialized products. And if the product is expected to sell to few, but selective customers that you have some form of relation with or if you are going to just flood the market with a product. Exactly how much will you let your customer satisfaction affect you when you go out and buy nails the next time? |