Monthly Archives: January 2014

The Cost of Losing A Customer

What are the costs of losing a customer?

I use to participate on Focus. com. It no longer exists, (so wish it did) but there was a ton of knowledge being shared for entrepreneurs and small businesses on this platform. Topics were on literally everything.

I thought this one was one of the simplest ways for anyone to grasp what the cost of losing a customer, losing just one customer could be for anyone’s business.

I love examples like these. The power of numbers and dollar signs combined.

Hard hitting facts that help you truly understand the value of each and every single customer you gain.

It’s also a great example to show you the future value of each and every prospect you are engaging with.

Hard numbers like these help put things in perspective perfectly 🙂

Focus expert Angel Tuccy, Radio Show Host wrote:

“Every customer has a lifetime value which equates to how much they would spend on a monthly or annual basis, multiplied by seven years (the average time they live in your area).

Then, multiply that number by 250 – this number represents their immediate sphere of influence.

For example: If you run a pizza restaurant.
One family equates to $20 per month or $240 a year X 7 = $1680.00 X 250 people = $420,000.00.

If you decide that their $20 pizza order isn’t worth earning their lifetime business, it could be a half-million dollar mistake.”

Action #1
Go figure out your lifetime value of a customer – if you don’t already know it.

Action #2
Questions to Ask Yourself Now that You Know This

1. Who did you engage with today to earn their trust, to turn that prospect into a customer?

Suggestion: Pick one new person if you haven’t yet, and get to know them more so you can build a stronger repoire. Let them get to trust you, by seeing what you are about, and the value you offer.

2. What did you do today to keep your current customers happy and coming back for more?

Suggestion: If you haven’t WOWed them in a while, do it today. If you haven’t shared something for free in a bit, do it today.

3. When was the last time you created something new for your customers that really serves them or covers a need, to give them a reason to come back for more? (to purchase something, pay for another service you offer)

4. When was the last time you specifically asked for a referral from any of your customers, all of your customers, or even just one specific customer?

Suggestion: When asking for a referral, be specific in the type of person you want. Also, it helps to make it a win for them as well.

ex: “For any 2 people you refer to me that are looking for a better solution for their email marketing, I will offer you a 10% discount on any of my products or services. And, because they were your referral, I will offer them a 5% discount to make them feel special, and so you look great, too.”

Action #3
This year, build your customer strategy around never losing one customer.

If you build this into your strategic infastructure, you are more likely to pay attention to this area in your business, and therefore less likely to lose a customer.

No one I know of is doing that specifically. Consider this one of my best tips 😉

Now go connect with your prospects and customers. There is no more important time spent in your business, as without them, you have no business.

Let me know your thoughts on this. Leave a comment below or head over to my facebook fanpage and share what you are doing to keep your prospects and customers with you, and not moving to your competition.

Then, use any of the Share icons below to share this one with everyone you know who has a business or is starting a business.