Try to control customer loss

TWO WISE MEN

Q: How do I recover lost customers or should I just focus on finding new ones?

A: Your existing customers will always be the best source of repeat business and your strongest advocates (as long as they are happy).

It costs 4-7 times more to sell to a new customer than to an existing one. Yet many businesses base all of their sales and marketing material around attracting new customers, completely ignoring those people they have already sold to.

Your customers have a lifetime value of the purchases they make from now on.

The best strategies for existing customers are those that are anticipated, relevant and personal: direct/addressed mail, personalised emails, customer events that you organise, social media, personal contact (pick up the phone and give them a call).

You still need strategies for attracting new customers but that should not be your sole focus. Good strategies for finding new customers include TV, radio, advertising (all channels), directory advertising, letterbox drops, billboards, signage, events (as a participant) and so on.

I am sure you have heard the adage "one unhappy customer will tell seven others". Keep your customers happy and they will be your advocates.

Steve O'Connor, GM of Creative HQ business incubator.

A: When you lose a customer it is always worth asking them why. This is a tough call to make, but you will learn from it. Often we have the wrong impression of why. Sometimes they can be recovered, other times it may pay to learn and move on.

Also remember not all customers are created equal. Ask whether the ones you have lost are your most profitable long-term customers or are they influencers in the market? If not, just move on.

Mark Robotham - GM Escalator Investment Ready Service - building investment ready businesses. Blog: succinct.co.nz.

If you want to contact either of our two wise men, please email BusinessDay@dompost.co.nz.

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