Getting New Business Leads: It’s a pity new business doesn’t arrive like manna from heaven. We simply have to go out and get it. Most of us hate prospecting. Yes, some people thrive on the chase, but for many, the very thought brings out negative feelings – from discomfort, right through to fear and paralysis. At the very words, ‘cold calling’, eyes roll, and hearts sink. Wouldn’t it be good to have a shortcut – an effective alternative to making fifty phone calls to strangers?
Luckily, most of you already have one, but may not recognise it. What would happen if you regarded lost customers as ‘warm leads’? Wouldn’t you like to win back some of your former clients?
Getting New Business Leads by Winning Back Lapsed Customers
Look at your new business target. Do you know your average client value? On average, how many clients do you need to generate €50k of new business?
Examine your list of former customers. To narrow the field, just take a specific time period. Omit bad payers and those who’ve closed. Now look at the remainder. Who would you really like to do business with again? Which are prospects for your most profitable product/service? Rank them in order of desirability.
Do you understand the real reason you lost their business? Take some time to figure it out. Bring your team into a room for a couple of hours with a pot of coffee and a flipchart, and work it through. Be honest with yourselves, and try to see beyond price as the only issue. What are your clients’ requirements, and how do you meet them (or not)?
What do you believe you can do about it? Are you helpless? Do you throw your hands in the air, and say “the customers have gone and I can’t get any of them back – they won’t buy from me again”? Perhaps you’re being defensive, and blame the competition “they’ll only undercut my price anyway, so there’s no point contacting them – I won’t waste my time.”
Go back to your flipchart – What has changed in your business in the last two years? What has changed for your lapsed customers? Perhaps the changes provide an opportunity for you to re-engage with them.
You may be unsure of the basis on which you should get back in touch. Generally, there are four broad strategies to consider:
- Educational approach: tell them about new product ranges/service options. Share your knowledge on how to get better value from their existing supplier. Maybe there’s a new person purchasing – or a different member of your team managing that account. Demonstrate your expertise and value to your sales prospect.
- Special promotions: a popular, and often quite effective strategy. To make this approach worthwhile, you need long-term value and benefits that survive after the promotional period. Otherwise, you’ll attract the serial switchers only, and find yourself in a vicious discounting cycle.
- Renewal anniversaries: This is widespread for fixed term contracts. (We’re all inundated with letters in the four weeks prior to insurance renewal.) If you’ve a good customer database, you may find other opportunities. How about a piece of large equipment that’s been in place 5 years – is it ready for upgrade/replacement? Could you offer an innovative service solution based on technology changes? Think big on this one – you can afford to be creative.
- Events: have a customer event that links into the first three approaches. I know one catering wholesaler who invited existing and some former customers to the annual catering exhibition in Dublin. They organised travel and meals, and linked the trip to their own promotion for those who attended on the day. The response was excellent. None of their competitors had done anything beyond sending out free tickets to the exhibition.
Use Your Reputation
The beauty of contacting lapsed customers is that you already have a relationship. Unless you did something pretty unacceptable in the past, chances are, your reputation is good. Often, it’s a case of ‘out of sight – out of mind’, and a phone call can get you back in front of the buyer. Yes, there are times when you’ll be used to squeeze more discount out of the incumbent, and No, you’re unlikely to win everyone back. On the positive side, you may get in, even in a limited way at first, just to keep a second supplier on board. Maybe you’re demonstrating a bit of hunger for the business that wasn’t previously apparent.
What impact would it have if you got 10% of your lost customers back? Would it be worth the effort? Do you have the belief in yourself and the confidence to make it work? With real focus, your conversion rate will be much higher on lapsed customers than on cold calls. Take the shortcut!