The Cost of Lost Customers

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Existing, loyal customers are valuable because:

  • They do not have to be acquired
  • They buy a broader range of products/services
  • They cost less to service as they are familiar with the company’s ways of doing business
  • They become less sensitive to price overtime
  • They can recommend by world of mouth
  • The process of retaining customers for a lifetime is an important one. Instead of one-way communication aimed solely at gaining a sale it is necessary to develop an effective two-way communication process to turn a prospect into a lifetime advocate.

Therefore, a small business or a freelancer should:

  • Focus on customer retention rather than attraction, for, 2/3 of customers are inactive or only purchase a product or service once. The other 1/3 could be counted as active, because of the repeat business they bring to the company. Regular customers will support your business and it is difficult for competitors to attract these customers away and they provide reliable income and turnover.
  • Develop an on-going relationship as opposed to a one-off transaction. This helps a business owner, or a freelancer understand their needs more easily, thus making the marketing process more straightforward.
  • Have a direct and regular customer contact rather than impersonal sales. Send regular newsletters about how the company is doing and what the customers want as improvements, rather than selling new products/services.
  • Multiply employee/customer contacts
  • Have quality and customer satisfaction as the main concern of all employees
  • Emphasize on key account relationship management
  • build trust and keep promises. Your future as a freelancer depends on how many recommendations you get from past customers. As a Freelance web designer, you know that working remotely with customers is high risk for a customer point of view. Customer would rely on your promises. This is therefore the first step to building trust and keeping your promise
  • Multiply exchanges with a number of parties. For example, build partnership with a number of professional bodies and trade associations in order to enhance your profile. Build partnership with other business owners or freelancers for referrals. Visit forums and blogdirectories where you will be most likely to meet freelancers and business owners.

Attracting news customers is the most expensive option. Therefore, as a freelancer or a small business owner, try to hang on to the existing ones! A freelancer job is to know how to work best with his/her clients.

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