customers vs. revenue image

- 11/23/2011

Ecommerce

Customers or Revenue: Which Matters More?

The short answer is that it depends.

Having both are critical to your business, but depending on the nature of your business, margins, and target market, the focus on customer and revenue may shift in priority.

If your product is a high margin niche product (e.g. airplanes), then a few large customers who drive a lot of revenue will suffice to sustain your company’s cash flows.

Conversely, if your products are low margin and profitability is dependent on volume (e.g. grocery stores), then having a large volume of customers is critical to keeping your business afloat.

Even free services like Facebook and Twitter are dependent on their millions of users to generate ad revenue (low margin, high volume) to keep their businesses afloat.

As for us, SumAll puts customers first…the revenue piece is just icing on the cake.

For some more reading on why e-commerce customer satisfaction is on the decline, check-out this post on GigaOm: E-Commerce Satisfaction Dips to Lowest Point in Six Years.


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