Every business loses customers. We all like to think we won’t; we all like to think our businesses are amazing enough – and provide enough value – that?we won’t lose any customers.
But the reality is – EVERY business does.
Sometimes it’s our fault – maybe one of our processes or systems didn’t work and a customer didn’t get the service or value they should have. Sometimes their needs simply weren’t a good fit with what our business could provide (and in those cases, we probably didn’t do an adequate job qualifying them when they were still a prospect). Sometimes their needs change and we can’t adequately help them anymore. And sometimes – who knows?
When business owners are looking to improve their financial results, an often overlooked source of “new” customers are “old” customers who have left. And it makes solid business sense to look to these customers.
After all, we know who they are, we usually have their contact information, and we know what they have bought from us in the past.
But before you rush into a full-on “customer reactivation campaign” and go contact all your old customers, wait.
Roll up your sleeves and do some analysis first.
What kind of analysis?
The most important one is to list your inactive customers along with the amount of business they did with you before they left. Since inactive customers often become inactive over a period of time by slowly purchasing less and less from you, you should look at how much business they did with you each year for the last three years.
That way you can identify their true potential. For example, an inactive customer may have purchased $1,000 of your products and services in the last year before they became inactive. But they may have routinely purchased $5,000 in a year prior to that.
A customer like this would be a better reactivation target than one who spent $1,500 with you before they became inactive, but that’s all they ever spent in a year.
What you are looking for is the potential gain in revenue (and gross profit) you will likely realize by reactivating specific customers.
Another thing you should analyze for each inactive customer is how much of an investment they forced you to make in them. For example, a customer who routinely purchased $3,000 of products and services from you before they became inactive may seem like a good reactivation target. However, if they were slow to pay and therefore forced you to tie up capital, they may not be as good of a reactivation target as you first thought.
This is an important step in planning your reactivation efforts because the worst thing you can do is “win back” a bunch of inactive customers who will cause you to tie up excess capital. That will actually cost you money rather than improve your financial results. And even worse, they will do it because you asked them to.
Getting old customers back is often surprisingly easy. You just need to ask.
But before you do ask them to come back, make sure you aren’t inviting people who will cause you repeat problems, and not add any profit to your business.
Sometimes old customers can be like vampires in some movies. They won’t come in until you invite them – but once you do, they sink their fangs into you and suck the life from you.
- What You Should Never DO or SAY to a Customer(diymarketers.com)
- Turn a Bad Customer Experience into a Good One(blogs.constantcontact.com)