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Holding on to customers in the downturn

The credit crunch has clearly caused some of my competitors to panic and they have lowered their prices in order to attract new business. They have approached my existing clients and we have lost out because of this. Also, business is on a general downturn, as it is for most people, and there are fewer and fewer new enquiries. I want to grow or at least maintain my customer base and I would appreciate advice on the best ways to do this.

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A. Tim Porter writes:

Getting and keeping customers can be a real challenge in the current economic climate, but here are some basic principles to help you during a recession:

Understand your customers and recognise your strengths: Find out why they do business with you and what makes you special. This will ensure you continue to meet their needs and better understand what your competitors aren’t doing right. It’ll also help you to be more effective when targeting new business.

Identify opportunities: From time to time customers are going to ask you for discounts. Although this can put pressure on your margins, it can also be an opportunity to ask for more business. So why not request an introduction to one of their other contacts or suppliers in return? You could also offer your customer a percentage of income or a discount for every referral.

Building on your relationships: Getting closer to your customers is vital when competition is rife. Evaluate how you build on your relationships by reviewing how often you contact key buyers. Do you allocate a set period each day to concentrate on new and existing business? Think about the channels you use to contact your customers, monitor your contact response rates and adapt your approach if it isn’t working. Equally, ask your customers how they would like to be contacted and arrange times for catch ups.

Review your processes: You need to be confident your business’ processes are robust, compare well with your competitors and offer easy ways to pay. Price will always be important to customers, but they may still consider using you if they’re confident you can deliver on time, provide good value and offer a quick and easy facility with minimum fuss.

Understand customer needs and make sure you’re available: Through regular contact you can understand your customers’ needs as things change for them. If you’re getting less business currently, can you help your customers to increase their return on investment? Finally, deliver on your promises, as a satisfied customer is far more likely to recommend you to others.