Article II - Legal Awareness Series

 Customer base enlargement- through the chain of references by Relatives & Friends


As seen in the previous Article I- any business entrepreneur’s first customers are his relatives and friends who in turn refer him to their relatives and friends resulting in a chain of actions and reactions.

Over the period these references and recommendations by relatives and friends directly as well indirectly result in the expansion of the customer base. This is simply because use and acceptance of the business entrepreneur’s products and services and the references and recommendations to friends and relatives through word of mouth.

At this point, the business is entering into a stage where the customer base is expanding from the first set of an entrepreneur’s relatives and friends to the new customer base formed by referrals by such relatives and friends to their other relatives and friends and so on…

This expanded customer base certainly needs to have more formal communication between the parties to bring in trust between the parties and make the deals/transactions successful.

As a result, the previous oral communication between the parties is now replaced by written enquires / quotations about the product or service by a prospective customer and a written response to the same by the business entrepreneur.

So now the business entrepreneur has reached a stage in his business expansion, wherein the transactions or deals are closed based on formal written enquires /quotations from the customer and commercial response to the same by the business entrepreneur. 

Cont...

For any query feel free to contact me.


Mahesh Vaidya
M.Com, LLM, ACS, DFM, CAIIB  
Legal Adviser
Cell Number 9769949701 / 9223173695
Email ID maheshvaidya2706@gmail.com

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