Winning back lost customers and getting them to buy again can give your sales a nice boost. And sometimes it is surprisingly simple to do, even when they haven’t made a purchase in months or years. Here are seven things you can do to regain those lost customers.
Lost customers are a fact of life for small and big businesses alike. Subscription-based services often use the term customer churn to refer to customers who stop buying. They keep a close eye on the “churn rate,” which is the percentage of people who stop buying, and they spend a lot of money to replace lost customers with new ones.
While your business may not think of lost customers as “churn,” chances are you do lose some customers every year. It’s likely you also spend a significant part of your budget to acquire new business, as you should. But what you may not realize is that you could be adding even more to your bottom line and at lower cost by trying to win back lost customers and clients.
Doing so, the Harvard Business Review points out, can be easier and less expensive than attracting new business because former customers already have shown a need for what you sell. Furthermore, you don’t’ have to spend time and money to make them aware of your brand.
In fact, those inactive clients and prospects that have been relegated to file cabinets, archived email, or are just sitting unnoticed in your database could be worth a goldmine. Here are seven ways to win back lost customers and boost your bottom line.
Why Customers and Clients Stop Buying
Sometimes businesses lose customers because the customers are dissatisfied with the product or service. But there are many other reasons consumers and businesses stop buying, too. Among them:
- They didn’t like the salesperson or service provider they dealt with.
- They are attracted to something that sounds like a better deal.
- Their needs change.
- Their financial circumstances changed.
- They are worried there may be a change in their financial situation.
- They haven’t heard from you for a while, so they’ve forgotten your company name.
- There’s a new purchasing agent responsible for buying what you sell.
- A friend or relative starts selling something similar.
- They joined a new networking group, and someone in the group pitched them on their service.
- They wanted to do or try something different.
- Their contact information has changed. (ie, they have a new phone number, email address, or if the contact is a woman, they got married and have a new last name.)
- Their orders didn’t arrive on time.
- A shipping error or other problem wasn’t handled satisfactorily.
- A competitor undercut your prices or provided better service.
- Your company changed locations or phone numbers and the customer didn’t have the new contact information.
- The customer thought one of your salespeople was rude or unprofessional.
There are more reasons why customers switch vendors and suppliers, too. What’s, important, however, is that many of these lost and inactive customers may still need what you sell and be willing to do business with you again.
Depending on what you sell, you could be losing thousands of dollars or tens of thousands of dollars in profits every year by ignoring them. Don’t let those sales go to other companies. Boost your profits by following these seven steps to get lost customers and prospects back again.
1 – Identify Customers to Contact
Look at your sales records and make a list of all customers who haven’t made a purchase in the last year. (If your customer list is in a database, have your programmer search the database and create the report.) Along with the customer names and contact information, including any data you can retrieve on the frequency of purchases, order size, and frequency for each customer. This will help; you focus on winning back lost customers who were the most profitable in the past.
2 – Send a First Class Postcard to All Inactive Contacts
Send a coupon or other promotional mailing on a postcard to all former customers and lost prospects. Doing so accomplishes two things: First, it will visually remind past customers about your company and your products. Second, if you send the postcards via first class mail and the customer is no longer at the address you have on file, the post office will either forward the mail to a new address (if it’s within the allowed forwarding time) or return it to you. When you get mail returned to you, you can look up the companies on the Internet to see if they are still in business and if so, call them to get updated contact information.
Be sure your postcard contains your website address and an email address as well as your physical location and phone number. The easier you make it for someone to contact you, the more likely they will. Although sending postcards is more time-consuming than sending out emails to former customers, the postcard offers the advantages of being a physical reminder of your business- one they might leave on their desk so they remember to contact you.
3 – Send Email, Too
If you have the email addresses of lost customers, send them an email too. The more ways you reach out to past customers, the more likely they’ll be to respond. You can send special offers in email to invite customers back, tell them about new offerings, staff changes, changes in your hours of operation or location, or anything else they may want to know. Be sure to include an email address they can respond to and your business phone number in case they want to call to place an order or discuss an issue with you.
4 – Call Your Best Former Contacts
These would be the individuals who placed the most profitable orders with you. They may have placed large orders once a year, or possibly a series of small orders over the course of a year that added up to a significant dollar amount each year. Tell them you’ve noticed they haven’t made a purchase or stopped into your shop lately. Ask if there’s anything you can help them with today.
5 – Ask What’s Kept Them Away?
If they say no, ask if they still buy what you sell. If they say yes, ask why they stopped buying from you. Was there some problem you can correct? If the business was lost because the customer was unhappy with your company, tell them you’re sorry they had a bad experience and explain what’s changed (if anything has). Then ask what you can do to win back their business. If the loss of business was because contact information changed, ask for the new contact information and update your records.
6 – Find Out If How Their Needs May Have Changed
Sometimes needs and trends change. Your boutique customers may be looking for more casual clothes this year than last. The company that ordered 300 keychain LED flashlights from you two years ago wants to send prospects tote bags filled with product information this year, and may want to hire one company to manufacture, stuff, and mail the totes. Or, the company that ordered 100 of your products last year, may need 10 times that many this year, and worry about your ability to meet their requirements on time.
7 – Ask for Their Business
Once you know why the former customer or prospect hasn’t purchased, determine the best approach to ask for their business. For instance, If they had a problem with a product and there have been changes made that address that problem, let them know and send them a free sample if feasible. If they’ve switched vendors and don’t give you a reason, ask what it would take to get their business back. If another vendor undercut your prices, ask if they’re getting the same level of service you had been providing.