- Who are your regular customers? What do they buy and why do they keep coming back?
- Who are the customers you no longer see? Why aren’t they returning?
Why is it important that you can answer these two questions? It’s simple. Regular customers form the base of your business. And customers who have left are key informants. Knowing why they left is knowing where you need to focus your efforts.
The loss of regular customers can have a substantial impact on your bottom line. That loss comes in three ways. First, you have the lifetime loss of sales. You may see only a $10 a week loss but that represents over $20,0000 in a lifetime.
The second loss is the cost of obtaining new customers to replace those who leave. It costs maybe $3-5 to keep a customer but at least $20 to obtain a new one.
The last, and greatest, loss though is losing the regular customers who are often your greatest ambassador. Their stories and testimonials are invaluable. And they do it often and are highly trusted within their networks and circles.
So it is to your advantage to be able to answer those first questions I asked. You probably have a great deal of this information already in your head, in your employee resource, and in your business records.
Once you have determined who is in each group, the hard work begins. Take the time to determine why some people stay and why the others have left. Today, social media offers a great resource to get some of this information. But having a conversation still remains key. Meet for coffee. Try some cold calling. Network.
Some of the most common reasons you will get as to why people leave include:
- They found a competitor. If so, find out why they switched and what you need to do to get them back.
- Your product or service was difficult to understand to make work.
- Your product or service didn’t perform. And your customer service did not fix the situation.
- Some may have forgotten about you. In today’s world of unending media and communication channels, your message has gotten lost. Keep your name in front of your customer.
It’s important that you take action; know your customers by staying in contact and listening; and keep your regulars aware of what is going on in your business.
Remember that your base is built on your regulars.
- About the Author
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Glenn Muske is an independent expert on rural small business, working as GM Consulting – Your partner in achieving small business success. He provides consulting, and writes articles for county extension agents and newspapers across North Dakota. Previously, he was the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality.