It surprises me how poorly we treat our most valuable company asset.
We wouldn’t dare buy an expensive piece of equipment for our business and then ignore it. If the machine required regular attention, we would put it on our calendar to regularly check it for oil levels and other maintenance requirements.
Yet there is an asset that each business consistently ignores.
What is this ignored asset?
Your customer list.
Businesses seem to focus so much on landing new customers they ignore their previous customers.
A good example of this is a client I had a few years ago. He was in the supplements business and was struggling. The company had been losing $12,000 per month for the last 18 months. They’d hired a high powered marketing consultant who didn’t know anything about small businesses.
When they would run short on funds the founder would hit up the investors for another round of funding.
I was brought in to help them raise more money. I’ve found over the years that money is rarely the real problem. That was the case here as well.
I asked them how many clients they’d had over the years. They had 160 active clients and 2,500 inactive clients. I asked when was the last time the inactive clients had been contacted…no one could remember.
I had two of the people in the company each call 20 former customers each day. Within 30 days they were more than breaking even and didn’t need emergency funding to keep the doors open.
In is important to regularly keep in touch with all of your current and former clients. It will pay big dividends. You should try to touch base with your current customers every 2 to 4 weeks and your previous customers every 4 to 8 weeks.
Each industry is different, but it is a good rule of thumb that 70% of your business should come from existing clients. If it is much less than that, you are leaving a lot of money on the table and under serving your customer base.
How do you nurture your customer list?
Regularly touch base with them. Do not try to sell them, but find out how they are doing.
- Call to find out what has been happening with them
- Send them a article that can help their business
- Call them about a helpful seminar you heard about
- Mail them a book or a whitepaper that would be of interest to them
- Send them an email about a helpful hint for their business
- Put them on your newsletter list either physical or electronic
One of my clients triples their daily sales every time they send out a newsletter to their list. The newsletter is not a sales pitch it is an informative article about the concerns the clients have.
For nearly 28 years, whenever I needed more consulting work, I would call up my list of former clients and ask them how they were doing. I would not ask if they needed help or try to promote my services. Instead after talking about their situation, they would say, I would like you to come over to see if you can help us out with a specific problem we are having. For every 10 phone calls I made, I end up with 2 or 3 appointments and land at least one new contract.