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Most small business articles focus on success, which is well and good if you succeed right away and remain successful. However, the fact is most small businesses go through months - or even years - of hard work before becoming moderately successful. One key to accelerating the arrival of success, is, oddly enough, maximizing the value of your failures, particularly those that result in the loss of a customer.
Most small business owners are so busy with other business functions that when one or two customers or clients vanish they simply turn their attention and energy elsewhere - usually into drumming up new business to replace the lost business. As a result, they don’t learn why they lose customers. The business just keeps losing them, and if it doesn’t replace them quickly enough then the business begins a death spiral. Even if the business does replace customers faster than it loses them, its growth potential is always hobbled - it’s always three steps forward and two steps back.
So, here’s a bold proposition. Forget about marketing to new customers for just a moment, and focus on customer retention (or the lack thereof). When you lose a customer, find out why. A quick, simple phone call or evaluation form will give you valuable information about where your business needs to improve or change. You may unearth the presence of a new competitor. You may find that you have customer service issues to address. Or, you may find that your market has changed. This is incredibly valuable information, and the only reliable source is your ex-customers!
It’s easy to do nothing, especially when doing something means confronting your mistakes. However, if you just sit tight while your customers bleed away, your client base may soon dwindle down to nothing. Rooting out the cause of intermediate failures will put you back on track, and may help you achieve success quicker.
In addition to being an essential tool that helps you refine your business operations, an evaluation form can be an early warning system when distributed to current customers. It can alert you to potential problem areas before they become serious problems - and before your competitors know about them either. Your current customers can even become a source of fresh ideas - or referrals - that will help differentiate or expand your business.
When you improve your customer retention, you won’t have to spend as much time or money frantically pursuing new business to replace lost business. And, the new business you do bring in will add directly to your bottom line! Maximizing what you get out of your business successes - that’s important. But, maximizing what you get out of your business failures - that’s the Tightwad Marketing edge.
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Here is a free customer evaluation form as a .pdf (Adobe Acrobat). You’ll see that there are two pages; the only difference between them is the font. The first page uses Times Roman, the second uses Arial. You can print the page that’s closest to your graphical style directly from your browser, and copy it onto your letterhead for distribution to your customers. If you mail invoices, you can probably include this form without changing your postage costs. It’s one of several worksheets that were part of my popular small business marketing seminar. If I were to write this for you from scratch, I’d probably charge about $140. But, it’s yours to use for your business, FREE.
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