Daymond John may pass judgement on the investment opportunities that come his way on Shark Tank, but the founder of FUBU has made his own financial blunders. John told Inc. that he was taking money out of his growing company when he should have kept it in the business. He denies his spending was “lavish,” but his actions at the time were not prudent.
Those mistakes are well in the past. But John’s failures taught him important lessons about business. He insists customer service is fundamental to a successful company. A customer’s needs must be met before an entrepreneur draws any money from the business.
Today, customer service isn’t about just closing the deal. It’s about developing relationships. John says you have to make customers feel special without always trying to sell them something.
John elaborated on the importance of customer relationships when he spoke with Forbes contributor Micah Solomon at a mentorship event in New York City.
“To over-deliver in service to a customer is by far the most valuable thing to a business. Because, there are only two ways to improve the operations of a business: increase sales or decrease costs. In today’s environment, decreasing costs is hard. And as far as increasing sales, doing so via customer service is highly effective.”
He emphasized customer service is about doing above and beyond the expected. It’s easier to upsell or resell than it is to acquire new customers. Loyal customers are the best brand ambassadors, and when your company does something wrong, those customers will tell you the truth.
John’s role on Shark Tank may have increased his desire to help fledgling companies get going. He told Inc. he plans to develop a startup incubator, with a difference: he may target people who face unique challenges.
“I know I’m going to do it, I’m just not certain if it’s going to be an incubator for kids with learning disabilities, like dyslexia or attention deficit disorder, or something else. I want it to be a little different in regards to the angle.”
John himself has dyslexia. So do his fellow sharks Barbara Corcoran and Kevin O’Leary. He does not have a timeline yet for the incubator, but is speaking with colleagues and partner organizations about the initiative.
“I’m corralling all our great corporate partners as well as my personal ‘Sharks’ to look into an incubator that I think will be powerful.”
Shark Tank returns to ABC in September.
[Photo by Cindy Ord / Getty Images Entertainment]