Lynn Daniel | Crain's Charlotte

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Lynn Daniel

Background:  

Charlotte’s The Daniel Group is a customer feedback solutions company that has helped its B2B client companies measure, manage and improve customer and employee experiences. For 27 years, the Daniel Group has provided ongoing, actionable employee and customer feedback through surveys, program assistance, strategic consulting and market research.

The Mistake: 

Not recognizing an opportunity right in front of my face.

Way back in my consulting career, I was doing mostly project consulting – and the problem with that type of consulting is that revenue streams are up and down. Sometimes you have a hard time developing long-term relationships with some clients. I was looking to help our clients and build a more sustainable business model, but I didn’t realize that the idea was right in front of me and was staring at me for five or six years before I realized, “Hey, there’s a business opportunity here.”

I just didn’t see it because I didn’t think creatively enough about how I might capitalize on that business opportunity.

The real problem facing a lot of the clients I was working with was customer retention. Back in the late '90s and early 2000s – and even still today – the focus was on finding new customers. But, in a lot of the industries I was working in, the customer base was actually shrinking. While so many businesses are dedicated to getting new customers, it’s so much more efficient and effective to work on keeping your customers. They will help you grow.

It’s so much more efficient and effective to work on keeping your customers.

The Lesson:

For our clients, they knew when they lost a big customer, but they didn’t realize when the lost the small and medium customers, which can actually cost a company more money. They lost customers that they didn’t want to lose and they had no idea that they had lost those customers.

Once I really started focusing on this, I wondered how I could shift the consulting firm and capitalize on this and help our customers. I really faced some daunting challenges for me because, at that time, we were a three-person consulting firm. A lot of what we had to do would require some really significant investments in technology, with no guarantee that it would work.

And it took a lot of soul-searching before I agreed to spend $60,000 on this new portal. I’d go on to spend more than $2 million on this portal, but it was necessary because as the program got started, we moved into a transactional service management survey process, we had to have something that would allow us to handle the large amounts of data electronically and get that to our clients immediately.

The real “a-ha” moment was when a client retained us to do a regular market research project. They were a Caterpillar dealer and they had gotten back an unfavorable report card. They retained us because they wanted more data points and to go more in-depth. I think that really triggered the change in the consulting business. The more we worked with this client, the more I realized they needed a solution to deliver more consistent service – and that’s what really convinced me there was an opportunity in this business model.

Follow Lynn on Twitter@customerloyalty.

Pictured: Lynn Daniel | Photo courtesy of The Daniel Group. 

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