A recent article about one of the world’s largest ferry boat systems says they are swiping money from one program to keep another program afloat.
Why are they forced to do this?
Increased costs coupled with a dwindling customer base.
A cry all too familiar to many businesses these days.
Swiping money from Peter to pay Paul may keep them afloat – but only temporarily. It’s a stop-gap method that eventually catches up to every business.
Did your business lose customers last year?
If “yes,” my guess is you can’t say for sure how many you lost, who you lost, why you lost them or where they went.
But one thing is for certain…
If you do nothing different, I can send you this same message next year too.
In stormy economic seas, investors turn more attention to preservation of capital vs. growth or yield.
The next four years provide tremendous opportunity, but also are filled with tremendous risk.
Business owners must give more attention to preservation of their business’ equity—which actually lies almost entirely in their relationship with their customers, and, of course, their personal capital: their time and energy.
Regrettably, many do not pay nearly enough attention to these things until forced to by adverse circumstances.
Most businesses get this wrong. They think it is easier to just keep trying to attract new customers. Aside from the fact that there is a finite pool of new customers, in truth, a great way to make more money is to stop losing customers.
This will require accurately determining what a customer is worth and what the cost of replacing a customer really is…so you can decide how much you are willing to invest to NOT lose a customer.
Next taking that investment and deciding how to apportion it, between programs for customer retention and winning back customers. Then designing, re-designing, beefing up and actually implementing both programs. Then testing, evaluating, improving, again and again.
In my own work and you’ll find in GKIC’s strategy, that a lot of time, money and work is spent in doing exactly this, even though we already have low loss/high retention and sophisticated multi-step, multi-faceted “stick” programs for new customers, and “keep” programs for continuing customers, and “rescue and recovery” for lost customers.
But we continue and will continue to add to, experiment with, refine and hopefully improve all three.
Often we will implement twenty or more different adjustments in a ninety day period. Some minor, some simple, some painfully complex.
How many are you testing in your three programs by June 30?
Every year, I’m somebody’s lost customer. Many don’t even realize I’m lost. I guess they think “gee, he hasn’t been in, in a while,” or perhaps they don’t even know I’m gone. Every year, national companies and local shops lose me as a customer. I can’t recall even one, ever, doing anything proactive and significant about their loss.
That is just one very practical suggestion for making a lot more money fast. Here’s another: upgrade customers before you lose them. You’ll then lose less automatically. This idea alone is worth giving a lot of thought.
You ought to HATE and I mean HATE—losing customers.
The athletes and teams who win a lot hate losing, even more than they like winning. To win races, you’ve got to hate losing. Winning is not sufficient motivation. You NEED to understand the true economics of losing customers.
You NEED to get yourself highly motivated and passionately committed to invest aggressively in not losing customers.
No business exists solely on its owners’ ability to get customers. Successful businesses sustain themselves only keep them.
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