What To Do When You Can’t Sell More

Without a doubt, the quickest and easiest way to generate more sales is to sell more to your current repeat customers. But sometimes, that just isn’t an option. Let me share an example…

I have a consulting client who purchased a business in distress several months ago. He was under the financial gun to get the business turned around quickly! He has a lot of experience with this particular industry, but absolutely no experience with marketing. So that’s where I came in…

Ordinarily, I would start creating up sell and cross sell strategies that would focus on current customers. Unfortunately, this business was in such bad shape, we had to look at the next best thing – former customers.

This is an activity that every single business can and should be doing. After you have your up sell and cross sell programs in place, the next thing to focus on is your bring ‘em back program. (And no, before you ask, “bring ‘em back program” is not an industry term. It’s strictly a Karenism.)

Luring your defected customers back to your business is relatively easy, especially considering studies show the number one reason customers leave is because they sense an indifference on the part of the business. So, basically, all you really need to do in order to win your lost customers back is to show them that you really care.

I know that sounds overly simplistic, but believe me, it doesn’t have to be a difficult process at all. Let me walk you through the steps I took with my own client:

• The first thing we did was decide which customers we wanted to invite back. You need to be rather particular with this step. Not every customer is a good customer and not every customer is one you want back. This step was a little difficult for us, because we didn’t have much personal knowledge about the individual customers. We created an ideal customer profile and then compared it against the sales and demographic data that we did have. The customers who did not match our target profile were discarded.
• Next, we figured out what we could afford to spend. The customer lifetime value of this particular business was paltry. But we chalked that up to the prior poor management and lack of customer service. My client knew that once he got the business turned around, his LTV would match or exceed the average for his industry. We used the industry average as our LTV figure.
• With the LTV in mind, we crafted our free offer. We created a coupon that could be exchanged for free products or services up to a certain dollar amount. There were no stipulations whatsoever, other than an expiration date. The customer did not need to buy any other items, just come in and exchange the coupon.

  Each coupon was personalized with the customer’s name and a few other identifiers. This served 2 purposes – it helped us combat the “indifference” the customer had previously experienced with this business. And it helped us track which customers were redeeming the coupons.

• I wrote a very personal letter for my client to send to each old customer. Again, all the letters were personalized. They explained how my client just purchased the business and apologized for any mistreatment the customers received in the past. He invited them to return to the store, experience all the changes, and reconsider doing business with him again. And he signed each of the letters by hand.
• Each customer who redeemed the offer received a personal phone call the next day from my client. He welcomed them back to the store and thanked them for their visit – even if all they did was redeem the coupon and not make any additional purchases. Believe it or not, we spent a long time writing this phone script, incorporating several persuasion techniques. We didn’t want to seem too pushy, but we definitely wanted the customer to come back and continue doing business under the new management. We also sent out a “New Customer Welcome Kit” that included several product tip sheets, a Meet The Staff biographies page, a few free samples and additional coupons.
• Anyone who didn’t redeem the coupon received a follow up letter that extended the expiration date for 10 more days. Our plan was to give the non-redeemers a personal phone call, but my client was suddenly so busy with his influx of come-back-customers, he didn’t have time to make the phone calls!

Our bring ‘em back program worked exceptionally well, and my client’s business had surpassed the “red ink stage” and was turning a profit in less than 3 months. It would be so easy for you to adapt a similar program for your own business, but be sure to keep these 4 keys to success in mind:

1. Be extremely picky about the customers you try to win back. Life is too short to work with unpleasant customers, and they end up costing you money in the long run. Use as much data as you have available to determine which customers are worth fighting for. Don’t skip this step or you might end up with a bunch of “undesirable” customers – and that’s nothing but a huge headache! It’s worth hiring a database expert or business strategist to help you with this step. Chances are, you have a lot more data at your fingertips than you realize.
2. Decide exactly what you can afford to spend and craft your offer accordingly. My client originally wanted to send restaurant gift certificates to each defected customer, but I quickly nixed that idea. By sending coupons instead, we were only spending money on the customers who actually came back into the store. Plus, we then had the opportunity to track those customers.
3. Be as personal as possible. My client was very hesitant about the tone of the first letter we sent. He thought it was “too soft” and painted the business in a bad light. But remember, your customers left because they thought you didn’t care. You need to show them you do care; you need to show them that you want a “personal relationship” with them. There’s no better way of doing this than by showing your vulnerable side. (We also could have incorporated personalized URLs into this campaign using my brand new .COMplete pURL marketing service. But since it’s not set to launch until April 1, we were just a few weeks too early.)
4. Use persuasion techniques to your advantage. Fortunately, I received my copywriting training under the legendary Michael Masterson, so I was well-versed in persuasion architecture. But you don’t need formal training for this – just go to the library and grab a book. Cialdini is the icon of persuasion, but Robert Levine has several good titles. There’s also How To Persuade People Who Don’t Want To Be Persuaded by Joel Bauer and Mark Levy and The Science of Influence by Kevin Hogan.

Action Item

Review your sales data for the last 2 years. Do you have many customers who purchased once and then never came back? Pull out the calculator – how much can you afford to spend to bring these customers back? Brainstorm at least 5 ideas for making your offer as personal as possible. Simply nix the ideas that don’t fit your plan.

Now, go find some more clients!

Karen Scharf

You might also be interested in:

• Small Business Marketing and Getting Referrals – Mistakes to Avoid
• Lead Generation with Social Media Marketing – How to Measure the Results
• Use Customer Testimonials to Increase Web Sales
• How To Market In A Bad Economy
• 5 Ways to Get Unstuck in Your Marketing – Part 1

This entry was posted on Saturday, May 8th, 2010 at 1:30 pm and is filed under Small Business Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.