Reaching out to past customers is effective and gets results

David FullerJason had been struggling for months trying to drum up new business for his company. The marketing firm he hired to drive leads was expensive, and he wasn’t getting near enough increase in sales to offset costs that had been growing significantly. Despite being in business for 20 years, Jason felt at wit’s end. He had never spent so much time and energy on marketing with so little success.

Many business owners are feeling the pinch right now. On the one hand, their costs, such as labour, transport, inventory, and heating, are all going up substantially. On the other hand, margins are being squeezed and the profitability of many companies is declining. The resulting stress owners are feeling is substantial. There is considerable pressure for them to increase their sales to ensure that there is enough money in the bank to make payroll, pay all the bills, and pay taxes, all the while hoping that they are going to have something left at the end of the year to put away for their future.

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When we look at company growth, we need to consider churn rates. Churn rates or attrition rates are the number of customers that are leaving your company for whatever reason. For example, if you gain 100 customers in a year but lose 110, your churn or attrition rate is higher than your growth rate, and your business is probably in decline.

Before we consider spending money on marketing to gain new customers, we might want to consider why people are leaving us and fix the issue. This might include a re-evaluation of customer service, pricing, location, delivery, technical issues, and product or service quality, to name a few. I recently worked with a business owner who had seen a decline in her business from $1 million a year to less than $200,000 because she couldn’t manage her inventory and have the products on hand her customers needed.

The most common reason people divorce a business is that they had a bad interaction with one of your team members. If this is the case, it is essential to determine if the relationship can be mended and if the staff member should still be working for you.

Once we figure out why customers are leaving us and fix the issue, we are ready to move on to the one simple thing you can do to increase sales without spending a lot of money.

While most companies focus on growing their sales by attracting new customers, one simple way to increase sales that many forget is to reach out to past customers. These customers are people like you and me, who have bought from you in the past, but for some reason, have moved on to purchase from your competition or not at all. These customers have purchased from you before and are likely, if given the right opportunity, to purchase from you again. Unfortunately, many businesses forget about these old customers in their race to find new ones.

If you have built a business with proper systems in place, there is a good chance that you can find out who those long-lost customers are. By spending time managing your database or working through old invoices or records, you can most likely dig up some names of past customers. Hopefully, if you have been around for a while, as Jason has been, you will have proper records of your customers, including contact information.

What happens next is up to you. However, coming up with a plan on how to reach out to past customers and invite them back is critical to your success. You will probably need to figure out why your customers have left you. In some cases, and depending on your business, you might want to have some crucial conversations with these former customers to understand why they left you and find out if you have genuinely fixed the issue.

Coming up with a plan to re-establish relationships with past customers may be easier than you think. In many cases it might just be a phone call or a visit from your sales rep. In other cases, it might take a personal invitation from the owner, whether with an email invite or a good old-fashioned postcard. The good news is that your past customers probably want to buy from you again if you were able to deliver something of value to them in the past.

If Jason lost 10 per cent of his customers each year for over 20 years, he probably has a list of customers almost equal to twice the number of active customers he currently has on the books.

How many more customers or clients would you have next year if you were to reach out to those customers you haven’t heard from in a while? It seems simple, but reaching out to past customers is effective and does get results that drive your sales at little cost.

Dave Fuller, MBA, is an award-winning business coach and a partner with Pivotleader Inc.

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