WINNING BACK OLD CUSTOMERS

by Bud Abraham

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A simple phone call and an understanding voice can help regain lost customers. If you're spending most of your advertising dollars chasing new customers, you are missing out on a huge and relatively cheap source of potential sales that is, your former customers.

Think about it: You already know their names, addresses and purchasing patterns, so you don't need to waste money trying to find customers. They are familiar with your company; so a lot of advertising is not required. And like it or not, there are probably a lot of old customers. The average company loses 20% of its customers every year, according to one national survey.

Fortunately; these folks may be surprisingly easy to win back, if you call them, listen to their concerns and demonstrate a willingness to help. Unlike others in your life, ex- customers generally do not hold a grudge. They often leave simply because they feel ignored. Joan Koob Cannie; author of the book Turning Lost Customers into Gold, states: "Many companies can get as much as 50% of their customers back simply by picking up the phone and demonstrating they give a damn." That is pretty powerful stuff, isn't it?

Despite the potential profits former customers represent, few detail shops bother to track which customers leave and why.

In a telephone survey conducted by the Marketing Report, a newsletter based in Malvern, Pa., it was discovered that 65% of the business executives did not have a system in place to track why customers left.

Yet well-maintained customer files are future sales waiting to happen. Why not review your customer list and look for those who had used your detail shop in the last year.

What you will find, I'd bet, is that almost 45% had switched to competitors for two reasons: you stopped pitching for their business and/or they were getting a better price and/or service elsewhere.

Some you will find are no longer in the area or their needs had changed. You will find that less than 5% of these customers would say they were dissatisfied with your work.

Four Step Plan

Try this four-step plan to help you win back lost customers or prevent your customers from leaving in the first place. It's not exactly the poetry of Cyrano de Bergerac, but in this courtship, you won't need poems and flowers. Your main role is to listen.

1. IDENTIFY THE CUSTOMERS YOU MOST WANT TO WIN BACK AND GO AFTER THEM.

Since 20% of customers often account for 80% of a business' profits, target the bulk of your win-back program to this elite segment. But don't automatically write off the little guys, because they may be among your most profitable customers. Create a profile of your ideal customer to identify potential ones beyond your big spenders.

Include characteristics such as geographic location, frequency of purchase, dollar amount spent per year, profitability, potential for future sales and the costs of winning and maintaining their business.

Some former customers may have big potential.

2. DEVELOP A "SWAT TEAM" TO PURSUE LOST CUSTOMERS.

A common mistake detail shop owners make is having a less than skilled person try to re- capture the business. What you need is a skilled telemarketing or customer service person trained to woo former customers. You can use someone or your existing staff if they are comfortable handling upset customers on the phone, or hire temp reps for this project, or you can do it. After all they are "your" customers.

Remember that the purpose of these phone calls is to learn how to fix the problem, not to make excuses for why it happened. Instead, ask questions that will help you assess levels of satisfaction with your detail service. Resist the temptation to make any sales pitch. These calls are an investment in future relationships with lost customers. You're not looking for a quick fix.

3. PAY ATTENTION TO WHAT YOUR EX-CUSTOMERS TELL YOU.

Personally call customers every month to see if they have any needs. If necessary; agree to pickup and deliver their vehicle.

Send out promotional materials announcing your new services and benefits to the customer.

4. CREATE AN EARLY WARNING SYSTEM THAT ALERTS YOU BEFORE CUSTOMERS GIVE YOU THE BOOT.

This means keeping close tabs on customer buying habits. How often do your best customers use your detail? Then carefully track these customers throughout the year. If you notice a decline in business, immediately call them and say, "We haven't seen you in a while. Are you still interested in having your vehicles detailed?" That often opens a useful dialogue.

If you call 20 customers each quarter, you should find only 10% complain of any problems, which will usually be the result of miscommunication. Resolve any complaint immediately which is an important way fixing sour relationships. The last thing an irate customer wants is to wait for a call-back. As an added touch, send a personal letter to all the customers called, thanking them for their business or addressing the complaint. This follow-up system will bring back the majority of your dormant customers and salvage at least 50% of the dissatisfied ones. You will also find such a program will reduce the number of customer complaints.

Unquestionably, lost-customer programs are tricky to implement and time-consuming to manage. But not only do win-back programs often attract new business, they also let you identify problems that affect the overall health of your business. Your customers - current or not - are your best teachers. Talking to lost customers can help you figure out where your shop has failed them in the past, where it is today; and where it should go tomorrow.

REMEMBER THE WORDS: "I'M SORRY"

OFTEN, WINNING BACK THE AFFECTIONS OF UNHAPPY CUSTOMERS TAKES JUST TWO WORDS: "I'M SORRY." APOLOGIZING COSTS NOTHING AND OFTEN TRANSFORMS AN IRATE CUSTOMER INTO A SATISFIED ONE.