Before you spend a fortune trying to drum up new business, get in touch with former customers. This entrepreneur and small-business columnist has suggestions for starting a contact program.
Phones not ringing? Orders down? Customers not walking in the door? It's time to take action. But before you spend a fortune trying to drum up new business, why not get in touch with those people who once loved you -- your former customers?
As hard as companies work to solicit and serve customers, I'm always surprised by how little most businesses do to stay in touch with those they once served so well. Many seem to have the attitude that once a job is done, it's done; once a product is sold, it's sold, and the relationship with the customer is over. I must admit I was guilty of this myself, especially in my consulting business. After all, how often did someone need a business plan?
That's short-term thinking. Former customers are the best source for future sales, even in businesses where customers make purchases only every few years. After all, satisfied customers talk to others, so they're an important referral source. It costs two to 40 times as much to acquire a customer as it does to keep one. So once you've got one, don't lose them.
Of course, it's best if you develop an ongoing customer communication program. But don't wait for that if you need dollars in the cash register now.
To get started on a contact program:
Make a list. If you're like most of us, you've got contact information all over: stacks of business cards, address lists in word processing files, customer invoices on a different computer altogether. Take a few hours to compile a list. Start with ALL former customers or clients -- go back at least five years. But don't stop there. Add anyone who has been -- or might be -- a source of referrals. This includes industry colleagues, suppliers, friends, even some relatives. Go through your address book, your accounts, those business card stacks, and your email in-box to jog your memory.
Select contact methods. Phone calls are a simple, personal, and effective way to touch base, and it's harder for someone to ignore your phone call than it is an email or a letter. Of course, calling takes time, so you may want to limit that to only your most likely prospects. E-mail can also be effective if you make your email personal rather than seeming like spam. I suspect you may not have current email addresses for many people on your contact list. So don't overlook the mail. The key is to be as personal as possible.
Figure out what to say. You don't need a specific reason to contact a former customer. You can tell them the truth, "it's been a while since we've talked, and I'm just touching base. I wanted to see how you've been and if there's anything I can do for you." You'll probably get more sales, however, if you make a specific offer, especially with a significant discount. One caution: if you haven't been in contact with someone for a long time, find out what's going on with them before making a sales pitch; their situation may have changed considerably. With referral sources and other contacts, tell them you're touching base to see how they're doing and to see if they know of anyone who might need your products or services.
Determine how ambitious you want to be. Two Web site designers I know each wanted to generate some new business and decided to get in touch with old contacts. Jennifer, who hates seeming pushy, finally forced herself to phone one former client. Mark sent out a mass e-mail to over 8,000 names, and got some angry anti-spam responses as well as a few inquiries. I suspect you'll find a happy medium between these two extremes.
During the recent boom years, many of us were so busy serving current accounts that we didn't have the time -- or the need -- to sustain connections with former customers or potential referral sources. Regardless of how well your business is doing, it's time to get back to those fundamentals. Remember, "word of mouth" advertising doesn't just happen; it has to be nurtured. So stay in touch. Now, pick up that phone!
Rhonda Abrams writes the nation's most widely-read small business column and is the author of The Successful Business Organizer, Wear Clean Underwear, and The Successful Business Plan: Secrets & Strategies. To receive Rhonda's free business tips newsletter, register at www.RhondaOnline.com.