Why you ask? I am glad you did!
Every business loses up to 20% of its customer base each year, no matter what; these are lost customers which must be replaced.
But where do they go, why do they leave and what happens if you don’t replace them with new customers?
Well some of it is out of your control, some of it is directly contributed to you and your people and some is nature.
Here are the top five reasons you are losing your customer base each year.
- They move away. Every community turns over 20% of its residents each year. Ten percent moving in and ten percent moving out. The average community turns over 100% every five years. And the average home owner owns their home for seven years or less. Once they move they have to find new local businesses that want to do business with. This is a high value, highly targeted advertising opportunity to get new customers and make them repeat and loyal customers without having to try and take them from your competition. They are looking for the services you provide. By definition they are the easiest and many times the lowest cost to reach.
- They die. Sadly there is not much you can do about this, people die.
- They are upset at something your business or your people either did or did not do for them or with them and they are angry and looking to use someone else.
- They are influenced by others advertising.
- They are looking for bargains and moving to coupon or discount shopping habits regardless of service history.
So even to stay level in revenue you must find a way to attract t least 20% of new business or new customers or new revenue each year just to not lose business.
And advertising your business is the only way to do this.
Advertising takes many forms from creative advertising, which tries to keep you in top of mind for when they need or want your service, to directional which tells them how to get in touch with you when they do need your service, to motivational which drives them to take action now to use your service. And there are mediums and advertising vehicles that fill all of these, some of these or one of these. You have to first decide what you are trying to accomplish before choosing how to advertise.
Advertising has many faces as well, especially in today’s world. You can use word of mouth, you can go digital, using social media and web based service like SEO and Ad Words for search results, you can use Television and Radio, you can use print, you can use direct mail, you could print novelties like pencils and pens and pass them out or door hangers and pass them out.
And to be honest all of them will work to some degree if you commit enough money for enough frequency and consistency in the message. But choosing the right one for your business which brings in the most potential business for the lowest cost is always the challenge.
One of the fastest growing most cost efficient ways to reach high value prospective customers who are in the market for your services, is our Town Hall Guide. We find new movers, and we get you noticed by people just moving into your community who must find your services and establish new relationships with the businesses in that community.
In the end advertising of some kind is a necessity, because the last thing you want to do is advertise your business for sale or going out of business because you didn’t replace those customers who leave by osmosis each year.