On the trail of your lost customers…
Understanding why your customer has stopped buying from you is the key to winning lost customers back.
Losing a customer is never a nice feeling
Even the best businesses have lost customers, often through no fault of their own. For every customer lost, another has to be found, otherwise your customer base would dwindle to nothing.
Sometimes it’s easy to be focused on answering the front door to new customers, and neglect existing customers leaving by the back door.
We all know that existing customers are easier to sell to – they know you and you know them. And loyal customers tend to be more profitable. So how do you increase the likelihood of them staying put?
How many customers have you lost?
First you need to determine what you’d consider to be a ‘lost customer’. If you keep records of each customer’s transactions, you’ll get the most accurate results. If you don’t, just make some sensible judgements.
On average, how often do your customers buy from you? Once a week, once a month, every 9 months? We’ll call this their ‘frequency’. Ok, now when did each customer last order? We call this their ‘recency’. So if a typical customer’s frequency is an order every 3 months, and the recency of their last order was 5 months ago, we may have problem.
So, why haven’t they called? Is there a good reason why they’ve gone AWOL?
It’s probably one of these common reasons, so here are a few ideas on how to stop them walking…
1. You messed up
It happens to the best of us so don’t get disheartened. See it as a great opportunity to make it up to lost customers and convert them into your number one fan. Remember though, just because they haven’t complained doesn’t mean that they are happy. However, research shows an unhappy client who has their problem resolved is more loyal than one who has never had a problem.
2. They just forgot about you
Ouch. Try to keep in touch as much as possible (without stalking them). Encourage lost customers to follow you on social media and have them on your marketing mailing list.
What would mailing them once a month do to your business? It’s a great way to stay on their radar. Add yourself to their mailing list too so you know what’s going on in their lives.
3. They’ve found it cheaper
Don’t panic. Especially in these times, it’s tempting to discount yourself out of business just to win them back. If you’re competing solely on price, there’ll always be someone to undercut you and the downward race to the bottom continues.
Give quality of service and value for money that they can’t get anywhere else. If they really want the cheapest then have the balls to say goodbye – it’s absolutely fine to ‘fire’ unprofitable customers. If your competitor lets them down, or your customer is disappointed with their quality, you’ll still be there with a box of tissues. Just don’t gloat… nobody likes a smartie pants.