If you were to lose your keys, wouldn’t you do everything you could to try and find them? How else are you going to get to work or to your kids soccer game or to the beach in the summer? The truth is, losing a customer should be treated with the same level of importance because they are valuable. Customers are what drive your business’ progress and are key to its growth.
Every time you lose a customer, you slow down just a little bit. I’ve already explored the importance of customers and why there is a real need to be able to identify lost customers quickly and efficiently in the first part of my blog series, which can be found here. In this next part I want to take a look at the value of regaining your lost customers.
I think Lisa Dennis expresses it well in her article “Finding your ‘lost customers’ – recovery tactics to rebuild relationships” when she says, “What if you could recover 10-20 percent of your lost customers? It would likely have a significant revenue impact for you not only this year, but in future years. Because we’re so focused on generating net new business, recovering old accounts is usually not a priority.” I have found this to be true. Think about the money you lose every time a customer decides to stop buying from you, even if it’s a small order you don’t think you’ll miss these can add up. Recovering 10-20 percent of your lost customers is no small fraction of your company’s revenue missing! In fact, that’s a pretty large chunk of capital gone. Consider, if your business loses only 10% of your customers, in around 5 years your business revenue will be about half of what it is now! You have to think long term to see the devastating impact of this. However, if you recover 10 percent of your customers, that means 10 percent more revenue every single year. In fact, by stopping the loss of customers and with only a 2% annual growth, your revenues will be UP by 10% in less than 5 years! You’ll be able to invest in more growth knowing you have that guaranteed money. Trust me, you can’t afford not to put effort into regaining lost customers.
The statistics below highlight how few companies dedicate time and resources into regaining lost customers. The article shows the percentage of marketing and sales executives who are in the dark and have “lost their keys” and aren’t really looking! (The full article can be found here.)
Why do so many companies fail to do a better job at regaining lost customers? Perhaps they need a tool to make it easier to quickly identify lost customers! These are just some of my thoughts on why it’s so important to regain your lost customers. Next week I will look into exactly how to do so.