A business that brings in new customers, but is poor at retaining existing customers, is not likely to be operating at optimal performance. Stop losing customers to competitors by following these three simple rules.
Making sales to new customers is six to nine times more expensive than retaining existing customers with a recurring monthly, or perhaps quarterly order. As such, losing customers to competitors can present a major challenge to any business.
There are many reasons why a customer may cease to purchase your products. In this blog, we will explore three common reasons why businesses lose customers to competitors, and then discuss how businesses can avoid losing customers without having to spend large amounts of time looking through individual accounts.
Make customers aware of your full product range
A common reason for customers to stop buying from a distributor or manufacturer, is because they are not aware of the full product range on offer. This may cause them to start purchasing a few items from a competitor. Once this occurs, the competitor is given the chance to offer discounts on bundled items and begin a new relationship. As a result, they may win the business of your customer.
Ensure products reflect current market demand
Another reason customers may choose to leave one supplier in favour of another, is that the products on offer simply no longer meet market demand. A typical example includes the increasing demand for eco-friendly products especially among the millennial buyers, and decreasing demand for products deemed to be environmentally damaging and ethically unappealing.
Get sales reps to service existing customers with helpful advice
Businesses that bring in new customers but forget to look after existing customers lose out on important revenue. Identifying cross-sell opportunities within an existing customer can boost your revenue as well as leave the customer feeling like they got a good deal. However, not identifying these opportunities leaves you vulnerable to your competitors’ sales tactics, and may cause you to lose customers.
The above three trends are easy to spot in a business intelligence (BI) solution if you know what to look for. However, businesses often do not know why they are losing customers, as there may be many reasons. Below we outline how your business can reduce the likelihood of losing customers regardless of the reason they stop buying from you.
Ways to prevent losing customers to competitors
Often businesses do not know they are losing a customer until the customer is no longer willing to meet with your sales reps or have stopped purchasing. Businesses who are able to identify customers who stop buying as it is occurring are much more likely to be able to retain the customer. This is because sales reps can visit the customer, determine why they are purchasing less from you, and put together an appropriate offer to remedy the issue.
If you are working with traditional reporting straight out of ERP and CRM systems, identifying a lost customer as they stop purchasing from you can be time intensive. However, by using a solution like Phocas business intelligence, it is easy to track customers who are ceasing to purchase your products. As a result, you can keep on top of customer retention, without having to spend much extra time. Many Phocas users are already experiencing the benefits of being able to track declining customers before they are lost, and report major time and cost savings.
Declining customers is one of many important sales metrics that are easy to measure in Phocas. Learn more in this free eBook Building the case for a data analytics solution.