You have it, why not use it?
Why do new customers buy from your business? Why do existing customers stay with you?
If you cannot give immediate and compelling answers to these questions then you are operating blindly. If you can answer these questions then ask yourself: “If those reasons are really strong enough for them to buy from me, then why don’t ALL the potential customers buy from me?”
The truth is that very few businesses have any kind of clarity about why customers come on board and then stay or go. Much of new business development relies on energy and luck. A lot of customer retention has more to do with inertia and relationships, than product and service superiority. Lost customers are blamed on unfair competition. The risk is that any competitor who finds a real compelling factor to attract customers is likely to grab them all.
This is an unnecessary risk, because the reasons customers join, stay or go are frequently in the business, but the information is not analysed or acted on. This leads to an ongoing loss of customers for little understood reasons, and an inability to duplicate the factors that brought new customers
It is very similar to the development of a customer database, the theme of these articles last year.
All the information for a customer database resides in the company records. The problem is that it is scattered in debtors’ records and cell phone contacts, in e-mail, address books, sales analysis and in notes or in the minds of sales people and warehousemen. Too often this information is not collated into a database and used.
In exactly the same manner the reasons customers join, stay or go are often available in the business, but unused. For example when a customer is lost, the sales pattern can generate actions to reduce the risk of losing other customers. Before a customer stopped buying, did his orders taper off or did he stop buying products he previously purchased? Which other customers are displaying the first signs of this trend? It is time to talk to them, they may be looking elsewhere.
Other information about the lost customer can be as easy to use. Was there a change in management? Were there complaints or a change in the pattern of payment? Was a change in price or terms a factor? When was the previous review with their management? Unless this information is extracted and examined, there is no way of eliminating the causes of this loss and so preventing other customers from leaving.
New customer gains can be made by duplicating the factors that motivated recent new customers to join. Which products did they buy first? Which manager or staff member was involved in securing the first order? Which competitor did they switch from? Are there patterns? Now duplicate the pattern.
In very large businesses they speak of data mining – extracting valuable business information which is in the records, but not visible. SME’s can do exactly the same, without the expensive software systems. Make a New Year’s resolution not to miss opportunities simply, because you did not look for and collate the available information.
The content in this article was provided by mentor and coach, Ed Hatton – Owner of The Marketing Director. The Marketing Director provides advice and guidance to small / medium businesses in the fields of strategy, marketing and sales and general business consulting
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