Last month I wrote about different types of customers. I also promised I’d expand more and be more specific about certain types of customers. Keeping my word, I’ll continue in this article.
It’s inevitable that we all lose customers from time to time. It’s simply impossible to satisfy and keep every customer we come in contact with. Sure, we’d all love to keep every customer, but we can’t.
You may find this statement incredible, but it is fact, 20 percent of the population moves every year. That’s right, one out of every five of your customers will move away within the next year, and there is nothing you can do about it. People move for better jobs, better houses, a better view and there is nothing you can do to stop it. Scary to think that in five years it is possible that you would have lost every single one of your customers in your customer list, but on the other hand for every customer that moves away, someone moves into the newly vacated house or apartment, but I’ve already covered that when I wrote about prospecting for new customers.
And then there is the sad fact that despite how much we would all like to live forever, try as we might, nobody is going to live forever, so we have to expect that some customers will die every year.
Finally, there is the fact that fashions change, lifestyles change, careers change and even end. As folks change jobs, their dress needs may also change. The biggest change of all is the demographic inevitability of baby boomers retiring putting them pretty much out of our dry cleaning market. Casual dress spreading in the work place and wash and wear fashion becoming the norm also reduces our market.
Despite all this bad news, you may have noticed that you still have customers coming through your doors. Now I don’t expect you, my readers, to take everything I say at full face value. I am going to challenge you to challenge me, so let’s do a little homework and see how my theories about lost and inactive customers stack up to what’s going on in your business.
I’d like you to go over to your point-of-sale system and see how many customers you have in your customer list. If you have not been cleaning up your customer list from time to time, removing customers who die, you may have thousands of customers in your point-of-sale system. Please write that number down as we are going to need it shortly.
Now, I’d like you to run another report, but this time I want you to put a time limit into the report. I want you to get a customer count of everybody who has done at least one transaction with you in the last 365 days. This is the number of active customers you have.
My definition of an active customer is someone who has done business with you at least ONCE in the past year. Even if it’s a free or zero dollar order, they count as an active customer.
My definition of an inactive customer is anyone who has NOT done any business with you in a year or more. So, now let’s subtract the number of active customers you have from your total number of customers you have in your database, and that’s the number of customers you have lost (people who have quit doing business with you).
Now, you might want to debate my definitions, and please feel free to contact me to do so, but I drew these lines for these definitions decades ago, but I would enjoy discussing my reasons why with you.
Now that we know how many inactive customers you have, and you know that you are losing customers year after year, I do have some good news for you…there is something you CAN do to slow down your customer loss rate. It’s an extremely simple process, all you have to do is ask or invite your customer to come back and do business with you again.
All too often, many business owners believe that when a customer has done business with them once, twice, or for years, they own the customer; they don’t have to ask a customer to come back because they will do so entirely on their own. Sorry, but you would be completely wrong. Fact is, once a customer has picked up their order from you they are completely free to go to another cleaner, there are no golden handcuffs beholding any customer to coming back to your store. We should never assume any customer is going to return, and just because you did a good job and satisfied your customer, that in itself is never an assurance a customer will return.
Asking for a return visit is fairly easy. Send them a post card asking or inviting the customer to return. Make a special offer, or give a small incentive to come back and trade again. Even a text message or an email message will work because after all, you ARE collecting contact information such as mailing address or cell phone number, aren’t you?
Keeping customers active and returning is the best way to keep your business growing. It is so hard to keep prospecting for new customers, but it so easy to keep the customers you have and had coming back simply by asking them. The small effort it takes to reach out to a current customer and inactive ones pays great dividends and is some of the most cost efficient advertising you can do. It takes ten times the effort and ten times the cost to attract one new customer than it does to activate an inactive customer, so why take the hard road? Start reaching out today!