What is the True Cost of Lapsed Customers?
We wrote a recent blog on Turning Lapsed Customers into a Profitable Revenue Stream.
We can all agree that loyal customers are what we all want. We need to work hard to fend off attack from competitors by offering the very best service we can. Satisfied customers can still be swayed. Delighted customers less so.
There are of course different types of lapsed customer. Sadly, some will have had an irretrievably bad experience. Others will have been tempted away and seduced by special offers or incentives. Others will just be infrequent purchasers that have almost forgotten who you are and don’t therefore exhibit any signs of loyalty.
If you have a large database of customers that might stretch back years, what analysis have you done on these? For example, the following questions may be relevant:
- Does the 80:20 rule apply? Does 80% of the business come from 20% of the customer base?
- How frequently do I communicate with the top 20%?
- How often do I meet them and how often do I call them?
- How are the remaining 20% profiled?
- What steps have we taken to identify the potential within these customers?
Clearly, most attention is focused on the big customers. But we’ve seen situations where small customers in terms of order values are large corporations with much greater potential revenue. It’s simply that either their needs are very specific and that’s what they order or there haven’t been made aware of other services. Equally, it can be the case that lack of contact means they haven’t felt like offering more of their business to you as a supplier.
Often, this 20% constitutes a large number of customers with whom it’s tough to communicate regularly. Therefore, they drop off the radar and little or no new information is added to the database and to what you know about them. There are all manner of questions you might want to know the answers for. For example:
- When do they review suppliers?
- How often do they review?
- What is their level of spend?
- Are they growing?
- Have they added any new aspects to their business you can support?
- How many other suppliers do they use?
The above is simply a snapshot. We’d always recommend formal customer satisfaction research and surveys to identify this and other insight.
However, profiling customers is essential. Too frequently, this type of exercise is not even considered. Calls can be scheduled on a quarterly basis to all accounts that don’t fall into key accounts (that’s not to say these couldn’t be included) to identify immediate opportunities and to evaluate future needs. This creates a pool of customers from which significant ongoing revenue can be gained. Telemarketing calls can be made on a continuous basis to nurture these accounts and to generate up sell and cross sell opportunities.
What’s more, this is easily measured and the ROI can simply be tracked to ensure that the exercise more than pays for itself.
If you’d like more information on how GSA can help stem the loss of customers and generate more revenue from your customer base, give us a call.
If you’d like to know how GSA Business Development can help generate growth for your business through telemarketing or social media lead generation or you’d like to book one of our new business development and marketing strategy workshops, contact us now on 0845 658 8192 or use the form on this site.