Get Your Customers to Stick to You Like Velcro: Uncover New Business Through Reactivation and Retention
By Colleen Francis
It's no secret that finding new customers is both time consuming and expensive, but it's worth noting just how much it could be costing you and your organization—no matter what kind of business you're in.
According to Frederick F. Reichheld, author of The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value, companies in America on average lose half their customers in five years and half their employees in four. In light of staggering figures like those, it's no wonder that most organizations out there feel as though they have no choice but to devote all their resources to finding and landing new customers constantly. And yet Reichheld also warns that there is a steep price to be paid for that choice at the exclusion of alternatives. His research suggests that acquiring new customers costs up to five times more than focusing on your existing base of clients. Don't make the same mistake!
The importance of reaching out and checking in
Top-performing sales professionals stay at the top of their game by ensuring that their prospecting efforts consist of a healthy blend of new leads as well as a focus on existing customers. They find ways to reach out to those they have done business with in the past, to see if there's an untapped need they can meet. Just as important, if it has been a while since they have heard from a customer, they find out why. Not only does it take less time and money to reach out and check in with people who have previously been sold on the benefits of your product or service, it's also a sure-fire way to build deeper personal relationships with those clients.
That's why it is vital that you have a retention and reactivation strategy as part of your sales arsenal. Let's look at how you can engage both of these strategies in your organization today—no matter how big or how small.
Think of your database as a goldmine
The first place you should start looking is your existing customer database. Some are more detailed than others, but most keep track of who you've done business with in the past, what they have bought from you and when. It's a potential goldmine for sales. With a little digging, you might surprise yourself at how many people you know!
You can uncover prospects who have called you in the past but who never bought from you. You may also find clients you haven't heard from in a while. Find out what happened. Did they choose one of your competitors instead? Were they lured away by a better offer? Were they unhappy with a previous experience? Or maybe it was simply that they hadn't heard from you in a while and that you had fallen off their radar. Whatever the reason, your job is to find out what happened and find a way to get these people back into your prospecting funnel.
Choose the right tool and have a clear message
Achieving those goals can be as simple as picking up the phone and making some calls. There are other options, too. A professionally written postcard campaign, a direct-mail letter or a tailor-made email campaign can also be very effective in getting the attention of readers and getting the response you're looking for. One of my clients recently showed me how they make optimal use of their database—consisting of some 20,000 prospects. They showed me how that data gets mined constantly for new business, including sending out invitations to attend teleseminars, online classes, as well as follow-up letters and emails simply to touch base.
Whichever tool you choose, make sure your message is crystal clear: we haven't heard from you in a while...we value your business...and we want the opportunity to demonstrate how much you mean to us. As an added incentive, include an offer in exchange for their reply. It could be something as simple as a gift card, an invitation to lunch at a local restaurant, or even a modest discount on their next purchase. What your offer says to the reader is this "I really care to hear what you have to say."
Leave no nugget of data unturned
There's one more thing to keep in mind about databases. There is an astonishing percentage of data in these things that's never been mined before. Never! I spoke with a tradeshow organizer who shared with me a shocking statistic—companies report that over 80 percent of all tradeshow leads are never followed up on. I've seen this happen with my own clients—one of whom acknowledged that they had probably 4,500 tradeshow leads in their company database...and none of which had ever been followed-up on. In cases like that, your best bet is to not spend any more money on trade shows until you first follow-up with the existing leads that you have in your database.
The benefits are clear
Reactivation and retention campaigns are cost effective, but that's really just the tip of the iceberg as far as benefits are concerned. These are activities that you can undertake on an ongoing basis. You can scale it according to your needs. Keep in mind the wise advice of Frederick F. Reichheld whom I spoke about earlier in this article: "It is much easier to fill a bucket when it isn't leaking." He notes that the typical Fortune 500 company has real annual growth of 2.5 percent. If it retains five percent more of its customers each year, real growth will triple to 7½ percent. Your efforts here can really pay off if you're consistent and your message is focused.
Remember, the people you reach via a retention or reactivation campaign are predisposed to listen to what you have to say. You've done business with them in the past. So don't be a stranger!
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Make sure you check out Colleen's latest book, Nonstop Sales Boom for powerful strategies to drive consistent sales growth quarter after quarter, year after year.
Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.
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