Few Hudson Valley organizations pay attention to the customer who costs the business the most, the one who quietly just stops buying. Most businesses spend all of their time in winning new customers, chasing after accounts that are late in paying their bills, and dealing with, or avoiding, loud complainers.

Why do customers leave? One percent die, three percent move away, five percent find other suppliers, nine percent switch for competitive reasons, such as price, 14 percent are dissatisfied with the product and 68 percent take their business elsewhere because they sense that the seller is indifferent toward them.

You probably lose more than two-thirds of your customers because you don’t show them how important they are to you. There’s no such thing as showing a customer too much attention.

A U.S. telephone sales manager for Graphic Controls was presented with a list of 3,000 past customers and asked to remove them from the database. Finding it hard to believe that the accounts were really worthless, he thought that these customers might buy again if they were given some attention.
His staff called each former customer, asking why they had stopped purchasing. The number one reason was lack of attention. By year’s end, 378 had placed new orders worth a total of $87,000. Eventually 20 percent of those supposedly dead accounts were resold, generating annual revenues of $350,000.

Most of the customers had slipped into that purge file because they had placed an order, received the shipment, and then never heard from Graphic Controls again. Staying in touch with your customers will keep the relationships alive, and eliminate the need to later revive them. That’s essential, because many Hudson Valley companies find that once customers close their accounts, it’s very hard to reopen them. By the time customers leave they’ve already been warmly welcomed by a competitor.

Customers on the verge of leaving usually give clues. For a regional bank, customer overdrafts increased. The bank’s policy had been to close accounts with a negative balance after 21 days. New teams began calling all overdrawn customers on the 14th day to ask what was wrong.

In many cases, the people they called were good, loyal customers who either had missed or misunderstood the bank’s notices. Most of these customers were grateful for the call, and quickly straightened out their accounts. Management calculated that saving just five percent of these customers could increase profits by 100 percent.

Calling customers to find out what’s on their minds is a smart way to build relationships. Why not encourage them to call you? Hook up a 24-hour suggestion line, using a simple answering machine or a voice-mail system. Invite your customers to report their complaints and their ideas at their convenience.

The best way to keep customers happy is to talk with them. There’s strong evidence that this personal touch translates into profits. Hudson Valley organizations often make the same old error. We get caught up in dealing with suppliers, employees, ad campaigns, profit and loss statements, and forget the most important thing that keeps us in business, our customer.

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