It is decisive for a company to get a loyal customer and maintain him forever. There is no concept in business that is constant; there are many pitfalls in terms of loss-making etc. However, it would be suitable and appropriate for a business to have customer retention policies in place also to bring back old customers.
We would advocate 5-basic ideas to formulate a timeline plan in order to reach your goal of bringing back your previous sales results; this is also essential for your business.
Critical Analysis to Examine Why Customers Stop Buying
Consider carefully if there are some internal factors that are detrimental to customers refraining to buy from you.
If you identify those internal factors at the very outset, the best thing would be to look at your historical data of customers’ buying pattern; basically, it is sales records to check possible trends and changing pattern.
Next step is to look at your sales time series data to identify all those positive or negative variations for addressing the problem. Even while you are examining at your data and trends, take the liberty to ask yourself the following questions:
Conduct RFM Analysis If Customers Discontinue Buying
Next, you analyze your sales data and ascertain some conceivable motives for the decline in sales. Here again, you will be required to consider the performance of your customers.
The best tool for this purpose would be an RFM analysis test. This technique is used to determine quantitatively the best customers. You can even conduct this test by just monitoring your customers in the following ways:
This technique will aid in classifying each of your customers according to the RFM score. Generally, the RFM score will have three numbers. Each of these numbers simplifies where the specific customer according to the regency, frequency and monetary value is.
This data of all your customers will now be classified according to the RFM score. For instance, if the best customers have 444 as RFM score, it denotes 4 for regency, 4 for frequency and 4 for monetary value; so on and so forth.
If the RFM score has variable digits this means that this customer has come and bought something from you recently, but his buying frequency in the analyzed period is far from satisfactory. Your objective will be to increase the frequency score of this customer. You will observe that you still have scope for improvements in terms of the amount of money this customer spent in your business. You may devise tactics like up-sells and cross-sells; the strategies can work well.
After you have done with this exercise of analysis, open your customer database and contact all customers for whom you feel need to be improved upon for RFM score.
When you’re Customers Stop Buying Your Product Analyze Your Competitors
Your competitors could be the culprit if your customers no more buy from you. This is the third step you will be required to pay attention to. Check the activities of your competitors in the period when your sales begin to dip. Find the answer to the following questions:
Often it has been found that there is a strong negative correlation between your sales results and competitor’s behavior. So it becomes imperative for you to be wary and investigate in detail for any shady activities. To check the activities, download the Competitive Analysis Template.
Do Your Customers Still Value & Cherish Your Products?
Get feedback, whether the products offered to your customers are still attractive. The probability for losing existing customers could be a lack of variety and interest and also the repetition of products. Absence of innovative ideas, new products and services could also be the reasons for customers losing the value of your offers.
It is also important for you always to deliver the best and premium value for your customers. Your key task as a business person is to:
Justify the Price Charged To Customers
The price quoted by you to your customers must commensurate with the value of the products. For an entrepreneur, implementing the right price is a sticky proposition. Thus far, you have evaluated the competition and ensuring customer experience. By improving the value that you offer your customers, you will know their choice or what your competitors offer. You could now estimate the value of your products’ worth. Put together all these strategies and make sure that the prices quoted to your customers are justified.
If it is not justified, change the pricing strategy to take part in the big game by considering the following points when your customers stop buying:
Try and retain your customers.
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