Sunday, January 25, 2009

Lost Customers and How to Get Them Back

Don’t listen to customers and this could happen to you!

I had been thinking about putting something together about how to regain and retain customers, and then it dawned on me that I had a personal experience that would be a perfect fit as lead in to the item. So here goes:

A Moment in History
I had been going to the same café daily for over 6 years, and mostly found it a great place to go; good food, excellent coffee and in general good service.

I walked out of the café a week ago as I had become frustrated with the way it was being run (or should that be ‘not being run’). In the time I had been going there I calculated that I had spent in excess of $17,000, not a bad sum from one person.

In the time I had been going to the café I had offered suggestions on how they could gain more customers, lift their standing in the café circuit and even build a reputation that would see them as a place of choice by the many businesses in their immediate area.

I even gave examples of promotions they could run, flyers, details as to the numbers of people working in some of the bigger businesses on their doorstep (in three buildings within minutes walk of the café there are more than 1800 people; not bad, but only about 20 people from these buildings frequent(ed) the café).

I was staggered to always here the same ‘excuse’ as to why they couldn’t do any of the promotions, and I had even researched as to what suppliers were likely to contribute to the promotions, I had done the homework. It was in (my mind) a no brainer to at least try these things.

Some of the ideas I put forward were:

Live Music – this would have been easy and cheap to do, there are music students right around the corner who would be more than willing to have the opportunity to perform.

Happy Hour – a flyer drop to the businesses offering them preferential prices crumbs if they only got 1% of these people along on any given day they would have increased their turnover. (18 people a day at an average spend of $8.00, over a 12 month period =$28,800, that’s almost the wages of one person working there).

Combo deals – Coffee and muffin for a set price, lunch and a drink for a set price, again a no brainer.

Any costs involved in doing these would have been offset by the potential increase in turnover.

More history
This café is on a main pedestrian thoroughfare, used by an estimated 15,000 people each day. It has one sign, telling people it is there, the sign can only able to be seen by people walking down the street; why not spend $200 and get a second sign made?

When I started going there was a group of about 20 regulars who went daily, today there are only 2; where have the rest gone? Who knows, it’s been over a week since I walked out, the staff and management have my email address and phone number but they haven’t bothered to call and see where I am.

What led me to walk out was seeing this place being run to the ground, and the staff moaning about how boring it was with no customers. The staff would come up to me almost daily and tell me what was going on, how bad turnover was and how they were generally fed up working there.

I had had enough, I had given suggestions, spent time and money putting together plans I knew would work to get new business, but this all fell on deaf ears. So I decided enough was enough, I didn’t need to keep hearing their problems, so I cancelled my lunch order and walked out.

I’m now going to a café where the staff are friendly, greet you pleasantly, take your order and leave you alone, already they have earned over $100 from me.

Will I go back to the other café? Not likely, I will only go back to discuss my dissatisfaction with the management, but I really see no point in this. I feel as though it is a lost cause.

Don’t lose your customers
If you find your business in the same situation, losing customers for ‘no apparent reason’ listen to your customers, find out what they like and don’t like about your business.

If your customers put forward suggestions, try some of them. Treat your customers like gold; they are the ones who keep your business going.

Why not get in touch with your lost customers and find out why they have left. Your customers may have leave for any number of reasons; some will not come back as they may have moved out of the area.

You need to find out why they left, then you need to get them coming back, Phone them and see where they are, why they haven’t been back. You don’t have to spend hours phoning them all at once. If you are going to phone them, set aside some time each week to phone past customers. Simply contact some past customers each week, every week, this will break the job into easily managed ‘chunks’, you’ll be surprised how many you contact if you break the numbers into manageable ‘chunks’ and they the numbers soon build up if you stick to a routine.

Bad experience
Any customer who has had a bad experience dealing with your business can provide some valuable feedback to help correct your business; if they had poor service or unfulfilled promises/guarantees, these need to be fixed immediately. If a past customer tells you this, thank them for telling you. When you have fixed any failing in your business raised by a past customer let them know that the problem has been corrected, and ask them to come back and try your business again. Even offer an incentive – a money back guarantee perhaps.

Better service, choices, options
If past customers tell you that they have found another business offering better service, a wider range of products/options elsewhere this is valuable information and offers market research (it’s telling you what your competitors are doing). This information helps you make decisions on whether you need to train your staff in customer service, offer more product ranges, generally helps you work out what you can do better than your competitors are doing.

If price is a reason, don’t think that you always have to match or better your competitors’ prices, sometimes this is unrealistic. Perhaps you can offer something else of more value, a price promise, service guarantees. Whatever you offer and promise make sure you can and will deliver on it.

Sometimes you have to be direct, simply come straight out and ask why they left and what you can do to get them back.

If you don’t have contact details for your ‘walk in customers’, you and your staff may recognise them in the street, if you see them, ask them why you haven’t seen them, be casual in a face-to-face situation, and remember let your staff know that they are empowered to do whatever it takes to get the customer back.

What can you offer to entice customers back?
If you’ve lost customers and want to get them back try some of these:

  • Let them know that you have corrected the failings, fixed the problem/reason that resulted in them leaving

  • Offer a guarantee or an assurance your products/services and service are all better than ever

  • Offer a special 'welcome back' deal

  • Thank them and truly acknowledge their feedback and their suggestion on how to improve business

Whatever you choose to do, be sincere and make sure you deliver on your promise.

Do things to keep your customers coming back
Now more than ever businesses of all types need to be looking at ways to retain customers. We all have ideas as to what we could do to ensure our customers stay with us; the main point is that now you have got some of your ‘lost’ customers back – you have to ensure you keep them. You can’t afford to loose them a second time, they more than likely won’t come back a second time.

Here are a few suggestions that you could look at doing in your business to ensure your customers keep coming.

  • Customer loyalty programme, perhaps even include special ‘privileges’ (invites to special events/launches), discounts on certain products, Try things that you feel will make your regular customers feel valued and good about doing business with you.

  • Ask for feedback, comments, suggestions, remember though that you will need to act promptly, let them know what action you have taken.

  • Give a gift at Christmas, or other known special time of the year (birthday, anniversary etc), use items that have company branding on them, or if a retailer you could offer a special birthday discount etc.

Stay in touch with your customers
Don’t fall into the trap of just doing business with your customers when they need something from you, be proactive and stay in touch with them throughout the year.

If you don’t already have a database set one up, you can use anything to capture customer details (excel, access, outlook etc)

If you’re a retail business ask customers for the contact details so you can send them special offers
Start regularly communicating with your customers through a newsletter or something similar; a printed one or an e-letter

Remember 20% of your customers account for 80% of your business.

Happy trading; and hope that this article has been of some help.

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