One of my favorite marketing challenges is helping our clients find new customers. But in an economic downturn we can't forget the enormous problem of losing current customers.
Formerly loyal customers can be tempted away by a competitor's lower prices. They may even decide to forego your product or service altogether, if the value proposition isn't clear to them anymore. It's no good to continue to fill the bucket with new customers, when current customers are leaving through a hole in the bottom.
Patching that hole should be one of your top priorities. And the first step is a detailed analysis of your customer file to answer questions like:
• How do we identify which customers are most likely to leave?
• What events seem to trigger the loss of a customer?
• Is there anything that can be done to prevent the triggering event?
• What can we do after the trigger is pulled to keep the customer with us?
Answer these questions and you have the beginning of a churn strategy. Put it in place now -- and keep it going, even when times are good.
Here's another, counter-intuitive question that your analysis could help with: Which customers do we want to fire?
Everyone knows the Pareto Principle, that 80% of your revenue is generated by 20% of your customers. A parallel truth -- call it the Spyro Principle -- is that 90% of your problems are caused by 2% of your customers.
That may be a blog post for another day.