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The Judeo-Christian philosophy of seven good years and seven lean years isn’t an optimistic view of the world. I choose to follow the Asian approach of one bad year followed by three good years. I guess that makes me an optimist by design.

This year promises to be one of extreme challenges to our moods and psyches. It is election year all across the country and we are about to be bombarded as never before. Wow, that does wonderful things for my outlook.

So, I want to start the year with a positive and direct message. You get what you earn or you get what you deserve. I want you to get what you earn.

Goal: 100%

How about we start with the goal of retaining every customer who did business with us over the past two years? Yes, I want you to do business in 2012 with every single customer who you did business with in 2010 and 2011. There will of course be exceptions such as people who are deceased or businesses that went bankrupt. But barring those, try to retain 100% of your customers who did business with you in 2010 and 2011. It’s a tough mission.

Start by making sure you can report on the mission. If you don’t have the ability to generate a report that shows customer purchases by year, now is the time to set one up. We want to see every month a list with customer names down the side and each year’s purchases in columns across the top: 2010, 2011, 2012. I would like you to review the list every month and note everyone who has a zero in the 2012 column. I know this will take time, but it is critical to do this on a regular basis.

Harvard University’s business school did the definitive work on customer retention in the 1990s. From it came a book called The Service Profit Chain. It states the impact of customer retention on business profitability. It says increase your customer retention by 5% and you will increase your business profitability by 45%. That’s right! Move from 80% retention to 85% retention and the profit of your company will go up by nearly 50%. (Sound a little familiar? We talked about this in our November column.) Pretty astounding, isn’t it? Well, in my consulting practice I have proven the same kind of results with my clients. It’s amazing!

Yes, They Should Buy

From your report you will see there are customers who purchased from you in 2010 who didn’t buy anything from you in 2011. Those customers defected from your business. Those particular customers in all likelihood stopped buying from you and no one in your company noticed. That’s what I want you to change.

Perhaps there are some of you who don’t think a customer will necessarily buy something from you each and every year. That has to change. Yes, every single customer who buys from you once a year should buy something from you every year. It is up to you. Perhaps it is maintenance of a pumping system, an annual checkup on a home installation, or just an accessory. But you have something that each customer requires and should buy from you to manage their water systems more effectively.

Retaining customers is important for a whole range of things. You get to know their likes and dislikes and how they like to be treated. They get to know more completely what you have to offer and how to deal with you. All of that makes it more difficult for them not to do business with you. That’s what it’s all about.

Every Part Every Day

I want to now focus on the parts business. As you do know by now, my No. 1 rule in parts is: “Find every part for every customer the same day they make the request or place the order.” And I mean find it—not put in an order with a vendor without knowing when it will ship. I mean find it such that you can have it shipped the same day.

I first did this in the 1970s during a strike of a major supplier of the distributor with whom I was working. We set the goal that we wouldn’t let the sun set on a day that we did not find every part. It was a 53-store operation that did millions of parts sales. The strike lasted for three months, and we failed just once. But I’m sure that everyone there at that time remembers it.

The point is we were able to accomplish a rather significant result. We found every part for three months every day before we went home for the day except once. I remember that with pride.

Well, here comes the rest of the story. When the strike ended, we obviously wanted to continue at that high level. We set the same goal to the same people, but we failed. We could not get the same sense of urgency for everyone involved the way we could with the strike as the rally point. That is the challenge I give to you this year in your parts operations. Find every part that every customer wants and do it before you go home.

So there are my two New Year’s resolutions for you. Retain 100% of your customers. Find every part every customer wants the same day.

If you pay attention to those two goals and work to achieve them, you will save yourself a lot of grief during the election funny season. Happy 2012!