Do you want to insulate your customers from your competition? Extend your customer’s “buying lifetime.” We call that, “Customer Retention.”
Here’s what I mean: How long, on average, do the people who buy from you… your customers… remain your customers?
In other words, how long do they continue doing business with you before they move on? Are they one-time buyers? Do they stay with you for a year? Five years, or ten years? Have you ever stopped to figure it out?
And then, what are you doing in your business right now to make sure your customers continue doing business with you?
If you don’t have a strategic plan… a working system in place you are going to lose a certain percent of your current customers to the competition. There’s no question about it. Your competition… right now… right this very minute is making plans and taking steps to take your customers away from you.
Now, the question is not, “What are you going to do about it?”
The real question is, “What are you currently doing about it?” “What are you doing about it right now?” What systems do you have in place to keep your customers from defecting to the competition?
Let’s talk about your customers for a minute. Are they thrilled enough with the products you offer and the services they receive from you to continue doing business with you year after year?
What if you answered “yes” to that question? Well, my next questions would be, “Are you sure? How do you know? Have you asked them? Do you have a system in place for finding out?”
Notice that I said, “Are they thrilled enough?” Not “are they satisfied enough?” You see, there’s a big difference between being thrilled and being satisfied.
In fact, last year, more than 200 million Americans stopped doing business with companies that they were “satisfied” with. And sixty percent of so-called “satisfied” customers switch companies or brands on a regular basis.
You can’t afford not to thrill your customers, nor to build trust in you and your business. The cost is too high, and unfortunately, most business owners simply don’t understand it.
Failing To Provide Exceptional Value Will Cost You
Let’s take a look at what the potential cost could be to you if you fail to do these things:
Let’s say that your average customer spends $80 per year with you.
And let’s say that for any number of reasons, 100 customers stop doing business with you each year. They may die or move away. They may no longer have need for your products or services… they may switch companies, have a relative in the business, or have a bad experience with someone in your organization and begin doing business with your competition.
Or they may just simply disagree with some policy you might have. It could be a falling out with an employee, a personality conflict, miscommunication, a product they wanted that wasn’t in stock, or perhaps a feeling of neglect from you or someone in your company. It really doesn’t matter what the reason, they just stop doing business with you.
Well, those 100 customers no longer spending $80 with you this year just cost you $8,000.
But that’s not all.
What if those 100 customers tell 5 others about their experience with you? That’s an additional 500 potential customers who won’t be doing business with you this year (or maybe ever, for that matter).
And if each of them spent an average of $80, that’s $40,000 you won’t be receiving from them… PLUS the $8,000 you lost on your existing customers who left.
That brings the total in lost revenues to $48,000 in just one year!
Your Customers Are The Most Valuable Asset You Have
The point is, customers are important. In fact, they’re critical. There’s no question about it. You and I both know that.
A business can’t remain in business, unless it has someone to buy its products and services. And those “someones” are people. Real people. People like you; people like me.
Businesses Don’t Buy From Businesses. People In Business Buy From Other People In Business.
It’s people that you market to. Not businesses.
Some businesses or professions refer to the people who trade with them as customers, clients or guests. Others call them patients, passengers or patrons. Insurance companies use the term “policyholders.”
It really doesn’t matter what name we give them, what’s important, is that without people who are willing to trade their dollars for the products and/or services that you have to offer, you won’t be in business very long.
Now, here’s an interesting point: Most business owners know exactly how much they have tied up in furniture, fixtures, equipment and inventory.
They can tell you nearly to the penny how much each item costs, how old it is, how much it’s depreciated and what the remaining life expectancy is.
That’s important information for any business to have; there’s no question about it. But what’s amazing is that very few business owners have any idea of what the value of their most important asset is…their customers.
Now, think about how this whole concept relates to your business for a minute. What is it that you can do… specifically, to extend your customer’s buying lifetime with you? Why not take a few minutes and answer these questions?
First of all, who are your customers… those who are buying from you now? Do you have a method of capturing their name, address and phone number? Do you have a way of determining how often they purchase from you? What their favorite colors, sizes or styles are?
And what about your staff or employees? Do you know how they treat or feel about your customers? Do they, or do you, for that matter, have favorite customers? What makes them a “favorite?” Is it how much they spend? How often they come in or buy from you? Is it their personality? And how do you treat those customers? Any differently than the others?
Do you have regular employee meetings and talk about how to think like a customer? What you would want if you were a prospect considering doing business with you for the first time? Or, maybe an existing customer considering giving repeat business to your establishment or organization? Or maybe considering referring a friend, a family member or an acquaintance?
Do you have a training system in place to teach your staff how to handle or deal with difficult customers? Short-tempered customers? Analytical customers?
Do you have a plan for moving people up the “Loyalty Ladder?” From Suspect, to Prospect, to Shopper. Then on to Customer, Client, and Advocate. And finally to convert them into Raving Fans?
When a customer stops doing business with you, do you know why? Do you have a system in place to find out? What would you have to do differently to get your customers to buy from you for… say, 5 ½ years, instead of just 5 years?
Believe me, if you will actually take the time to go through these questions and formulate answers for them… and then incorporate that information into your business practices, you can work wonders towards extending the buying lifetime of your customers. And as a result, you’ll add significant profits to your bottom line.