Every business is different. This is not news. Every company has different needs, different goals, different structures and rules. The one thing every business has in common, no matter how big, how new or how well known, is the need for customers.

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Without customers, your business will crash and burn. Without customers your company will never grow and develop into an industry leader. This common denominator stands true for all businesses, but especially for wholesale distributors who are likely to have larger customers, where the loss of even a small number of customers can have a tremendous impact on your bottom line. It is because customers are so crucial to a business, that when a customer stops buying from you, it is a huge deal. While gaining new customers is always important, it is just as, if not more, important to retain your existing customers.

 

In this 3 part blog series, I would like to go over this idea of retaining existing customers and what to do if you do lose a current customer. In this first installment of the series I would like to discuss the importance of customers and why there is a real need to be able to identify lost customers quickly and efficiently. Below are just a few reasons why knowing which customers have stopped buying and being able to quickly recognize when they’ve stopped buying is so important:

  • Customers are what keep your company floating – It can’t be stated enough just how much customers matter to your company. Without people buying what you sell you’re not making any money, you’re not expanding, and you could sink into a debt hole too deep to escape.
  • In with the old and in with the new – Gaining new customers is crucial, but you have to keep your current customers happy. If you have a customer who has been buying the same products for 3 years like clockwork, it would be understandable to assume that order is coming again. But what about that day that the “guaranteed” money doesn’t come in? Now you are overstocked on the items that you stocked based on that expected order.
  • You can’t fix what you can’t see – If you do lose a customer, you need to know right away. You need to know who, what, when and why. You should be able to identify exactly who stopped buying, what items they stopped buying, when they stopped buying them, and most importantly why they stopped buying them. Did they find a better deal, better quality, or better service? You need to know. If you are not able to quickly learn the answer to these questions you cannot fix the problem.
  • The domino effect – If you are unable to retain one customer, it could lead to more. If you do not identify that customers are leaving and then diagnose the cause, the problem will likely continue. This will lead to more lost customers and more lost profit.

The good news is you don’t have to struggle with a system that doesn’t identify those lost customers quickly. I am very familiar with an inventory reporting tool that helps you quickly identify customers who have stopped buying from you, rank the impact of that loss based on their sales history, as well as identify all of the items that they bought. This knowledge will allow you to adjust your inventory and your business strategy. Customers are the backbone of your business.  I like this quote from Will Henry, “The wishbone will never replace the backbone.”  Don’t just “wish” you hadn’t lost those customers, take action to learn from the experience and reach out to those customers, learn about their problem, and possibly win them back!

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