Dear ,
This post should scare the heck out of you and be one of biggest, butt kicking “uh-huh” moment all at the same time.
Growing your business is not just about getting as many new clients as you possible can.
Just think about this for a moment.
If you are loosing 20% of your clients through attrition (which is, um, “normal”) to grow your business by 10% each year you must increase your business by staggering 33% each year.
That’s – 20% to replace the clients you lost PLUS 3% for inflation PLUS 10% for growth.
And 10% growth is nothing mind blowing!
Here’s the good news – it’s not really difficult to reduce your client attrition rates.
Put another way – holding onto an extra 10% of your current clients (who are just about to walk out the door) is lot easier than finding 10% in new clients.
But just before we get into it – it is important to understand the reasons clients stop buying from you are not as important as what you can do with the knowledge itself, like fix a problem in your business.
Because if it’s bad enough to make one client leave, you can be sure others are thing the same thing and just waiting for a good excuse to dump you.
Right, so there are 3 basic reasons a client will stop buying from you:
1. They do it temporarily. They had an unexpected bill, they went on holidays – again the reason itself doesn’t matter.
What has actually happened is their buying pattern as been interrupted and since humans are creatures of habit – once someone falls out of a habit (like buying from you), it’s easy to fall into a new habit (like buying from someone else). Out of sight, out of mind.
Time to give them a call and find out why they stopped buying – and get them back on track. No point in letting someone else take your hard earned client away from you.
2. They are dissatisfied with your company, product or level of service. Now as much as people will sit around a BBQ and complain about how XYZ company is driving them up the wall – rarely do they confront XYZ company and give them the piece their mind they have been threatening (no matter how brave and determined they appear in front of their mates).
What actually happens is they just stop doing business with you and find someone else to fill their need, solve their problem and hope they are going to get a better product, services etc.
Again – time to give them a call and ask them why they stopped buying. It is only then you can start to solve their problem (and maybe a problem in your business which needs attention).
3. The clients situation has changed and they can no longer benefit from your product or service. This is not the end of the line – as they may still be able to recommend new client to use your product or services.
Again – you are not going to know this unless you give them a call. Make sure you wish them well and reminded them if every they need your product or service to make sure they give you a call first. You may even want to send them a little thank you for doing business with you over the years, months, weeks…
Some of the biggest growth a business can experience is achieved by fixing the reasons clients leave them in the first place.
Make Your Marketing Work Harder,
James Hill
PS. Marketing is not always about getting in front of new clients. Sometimes you need to do a little bit of in-house brand management to ensure your business stays on track.
PPS. You will most likely find a lot more new clients come to your business in the first place when you plug all the holes (the reasons clients leave).