“Cash Cow” Marketing Idea: The Surpising Reasons Customers Stop Buying From You and How To Change That In a Hurry
Advice from America’s most expensive business consultant, Jay Abraham, who has advised such companies as Sears, AT&T, Weight Watchers, Federal Express and hundreds more.
[Image]Why Customers Stop Buying From You Q&A with Jay Abraham
We think of them like we do our children. When they’re away too long, we not only worry about them, we imagine the worst…
They’ve gone off to the competitors for a better price…They got disrespectful service from us and wouldn’t come back for any reason…One of our products was defective and they decided to try somebody else’s widget…An offshore discounter swooped in and gave them a deal they couldn’t refuse…Another client told them we sold it to them cheaper.
Here, Jay tackles some typical questions about where all the customers have gone.
Q: You’ve got some good news about my former customers?
A: Not just good news. Maybe some great news. But first, let’s get some terms straight. Most of the customers who haven’t done business with you for a while are not former customers, gone down the drain. It may appear that way, especially if they have been away a year or more. But most are more accurately inactive customers. There’s a big difference. Inactives can easily be reactivated.
Q: Why do you say most are merely inactive?
A: Because although people stop buying from you for a reason, it’s not usually the reason you might expect. Something often occurs in their lives . . . a problem or diversion . . . somebody gets sick or quits or gets transferred — or any one of a hundred other real-life reasons that have absolutely nothing to do with their satisfaction level with your company or your performance.
Q: But if they like my goods, wouldn’t they eventually come back, sooner or later?
A: Not necessarily, and I’ll tell you why in a single word: Inertia. An inability to make the effort, and for no one special reason. I’d worry much more about inertia gripping your customers than any competitor.
In fact, you could even call inertia your BIGGEST competitor. Think about your own life for a minute. You’re bombarded every day with thousands of distractions that vie for your attention and time. It takes it’s toll.
What happens: You’re lulled into inaction on all but the most immediate considerations. And once you stop dealing regularly with a company or professional, no matter how good or valuable the product or service used to be, you tend to forget, or at least desire, the product or service.
Prime example: Like me, have you ever let a magazine subscription lapse just because you never quite got around to re-subscribing, even though you truly enjoy the magazine? The vast majority of subscribers exhibit this same behavior. That’s why the average renewal rate for most periodicals is less than 40%!
Amazing survey: A well-known department store decided to survey a cross-section of a hundred charge-account customers who hadn’t done business with the store for over a year. Calls were made and the people were asked to state frankly what had happened.
Here are the amazing results:
** 68 said there was no special reason
** 14 had grievances that were not addressed
** 9 were lured away by lower price or better service
** 3 had moved and were shopping in other areas
** 1 could give no response — he was dead
Bottom line: More than HALF of your customer fall-off is likely the result of loyal, satisfied customers and clients intending only to temporarily stop doing business, but never quite getting around to starting up again.
Q: What are some effective, non-traditional approaches to getting customers to reactivate?
A: One is sending unsolicited gifts to people, which can vary in value depending on how big a customer they used to be. It certainly gets attention, plus it frankly makes the recipient feel something of an obligation to reconnect with you.
Gift idea: A colleague of mine sent a Swiss army knife to several coveted, yet inactive clients, along with a letter that talked about how the knife’s functions might remind them of all the valuable ways the client can benefit from his services. It worked. Fifty percent of the clients contacted called and returned to the fold. And the promotion cost my client all of $200.
Q: What about just the average customer, can I get them back with a simple letter?
A: Absolutely. In fact, some of the most inspired sales letters I’ve ever seen are those written to win back inactive buyers. And the motivation is obvious. It costs TWENTY TIMES MORE to acquire a new customer than to reactivate an old one — which costs you virtually nothing.
In Part II of this topic I’ll share a favorite letter of Jay’s to give you an idea about the content, plus a couple of other terrific ideas to reactivate your clients and customers.
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