Platt Perspective on Business and Technology

Online store, online market space – part 22: balancing one-off and recurring sales revenue streams 1

Posted in startups, strategy and planning by Timothy Platt on August 23, 2013

This is the twenty second installment in a series on building an online store as a new business (see Startups and Early Stage Businesses, postings 20 and loosely following for Parts 1-21.)

I have written about a fairly wide range of issues that go into building an online store, or a new business venture in general. And I continue this here with a goal of presenting some best practices for developing ongoing business opportunities.

• That can mean bringing the same customers back to make repeated, even if essentially one-off purchases, which I will refer to here as repeat business,
• Or it can mean keeping the same customers engaged with your business through more long-term purchasing agreements, and where an initial purchase serves to begin a longer term business relationship, which I will refer to here as recurring business.

It should be a fundamental goal of essentially any business to cultivate and develop a base of repeat business, recurring business and both. I add that this principle even applies to most businesses that at first glance might seem to be limited to one-off and one time only customer transactions. An example that comes immediately to mind for me there is provided by funeral homes. Any one person who is brought to one of these businesses, is probably only going to require such services once but most funeral home directors actively seek to develop positive relationships with the families of these recently deceased so if and when someone else dies, their surviving relatives will think of that business.

• Even businesses that would most clearly seem to be exceptions to this rule, still do best when they can and do actively pursue and cultivate repeat and where appropriate, recurring business.

For a funeral home, a service for maintaining burial plots with weed removal and other, related ongoing support could in fact make even ongoing recurring business a possibility for them. So this posting is about identifying areas of opportunity that would be a good fit for a business and for its customers, for adding repeat and recurring business options to its offerings.

• Repeat business is in primary part a matter of marketing and of developing positive relationships with customers. When a business reaches out to and connects effectively with its customers, they will prove more likely to come back, and they are more likely to share word of their positive experiences with others too and offer viral marketing support.
• Recurring business is primarily about what is being offered, and in this it is all about asking “what else could I offer my customers that they would see as adding additional value to them?” Recurring business is all about creating value added opportunity and with value in this defined by the customer and the business as a collaboration, and not just by the business.

Every business has one time customers, and every business makes one time sales, and even when those customers are completely satisfied with their products and services received and with their experience dealing with that business. But every business should think and plan and execute and at all levels, in terms of longer term customer relations.

I have added this posting to my Startups and Early Stage Businesses directory for a very simple reason. This is an approach that is easiest to realize if it is built into a business from its beginning, and as a part of its core foundations and its core identity.

This is my first posting to a new line of discussion for this series, and I will continue it in a next installment, there focusing on business models and corporate cultures. And both sides of that face both novel opportunity and novel challenges for an online business and I will discuss that side of this set of issues too. Meanwhile, you can find this series and related postings at Startups and Early Stage Businesses and also at Business Strategy and Operations and its continuation pages Business Strategy and Operations – 2 and Business Strategy and Operations – 3.

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