Advice on spotting customers before you lose them
Here’s a startling fact: some of the companies that lose the fewest customers don’t necessarily have the best products or even the best service. They have the best information which alerts them to when a customer might be switching. It’s unusual for a long-standing customer to flounce off all of a sudden. Usually, there will be warning signs. These include a steady reduction in orders, more complaints over trivial matters, and taking longer to pay.
Here’s the nub of the problem. While these and other things are happening, those running the business – even account managers – don’t spot the warning signs. And that’s usually because they don’t have the information to alert them. So this isn’t about lost customers. It’s really about getting better business information or business intelligence – to use the fancy title that consultants love. What business intelligence amounts to is delivering the right information to the right people at the right time, in a way which enables them to use it.
If you could identify those signals which indicate a customer might be about to quit, you could set up an information system to monitor the data and deliver alerts to whichever member of staff needs them. Pictures work really well when it comes to reviewing information – particularly trends. So, for example, a bar chart showing a customer’s orders by month would soon reveal those whose business is dropping off.
There may be an innocent explanation, such as the fact that they need less of your product – but at least you’re alerted so you can investigate further and take corrective action if needs be. The starting point in using business intelligence is to think of the kind of questions you need to answer in order to run your business better.
Too many businesses haven’t changed the information they review for years. Some may be looking at information which is meaningless when it comes to spotting trends or making predictions about the future. Most companies are sitting on more information than they realise. Getting the value out of that involves finding ways to collect the information and make the best of use of it.
The main challenge when it comes to useful customer intelligence is finding the time to sit down and think about future processes. There are plenty of IT tools that can help. If it means holding on to a valuable customer, it will be time very well spent.
Peter Bartram’s background in IT and Finance makes him the ideal person to provide useful hints, tips and information for SMEs – brought to you by Moneypenny.