Mar 11, 2022
This Podcast Is Episode Number 462, And It's About How To Win Your Clients Back And The Secrets To Getting The Best Projects
Here are some strategies to win back clients who have left:
1. Ask why they left
You can learn a lot from customers simply by asking the right questions. The information you get may enable you to make some adjustments or start a conversation to win them back. For example, you may learn that your service is missing a vital feature that your competitors offer. Based on that, you may want to adjust your product or service.
Consider sending a survey to your customers to find out not only why they left, but why they chose you in the first place, and what you could do to win them back. These surveys can be sent when someone cancels their membership or goes a long time without hiring your company.
Ask questions like:
- Why did you decide to become our customer?
- What did you like most about our product/service?
- What circumstances caused you to leave our company?
- If you switched to a competitor, what made you choose them?
- What could we do to earn back your business?
2. Identify people who are more likely to come back to you
You won't win over every lapsed customer, but some are more likely to return to you. Those include people who left because of pricing rather than service issues, those who went without voicing any complaints, and those who referred you to others. Additionally, the clients who purchased the most from you were also likely delighted with you at some point and probably easier to sell to again.
This step is more straightforward if you have customer relationship management (CRM) software and follow your clients through their lifecycle.
3. Offer the right solutions
Determine what you're willing to do to win them back and develop solutions that could address their reasons for leaving. For example, if you're ready to lower your price slightly or offer a special discount for returning customers, you can show that to lapsed clients. Consider that solution if you don't want to drop the price but can offer a premium service at no additional cost.
If customers say your service didn't have enough features, let them know you're upgrading your packages and invite their feedback on the changes you make. This allows them to know you heard their concerns and gets them invested in the final offer.
4. Know your churn rate
Your churn rate is the percentage of people who stop using your service in a period. You determine the time (say, a week, a month, a quarter, or a year). Take the number of customers you lost in a time and divide by the number of customers you had at the start of that same period. Then, multiply that number by 100 to get the percentage.
If you have 500 customers at the start of the month and lose 10, you have a churn rate of 2%.
A lower churn rate indicates you have happy customers who love your brand and service.
The Secret To Winning Bids And Getting The Best Projects
Not everyone seems to realize that in construction, money is not made in the field by working and pushing boundaries of tactical efforts - working harder and faster. Money is made in the office developing and implementing strategy.
For example, a backhoe takes longer and more skill to mobilize and demobilize on and off a job site than a shovel. Tactics mean using a shovel for all earth-moving projects. Strategy means knowing when to use a backhoe and a shovel.
QuickBooks has over a hundred reports that can be viewed regularly. You could spend all of your time seeing a report in QuickBooks and trying to find a way to populate numbers in the report. Many reports are designed for specific things. Take, for example, the view of the Home Page. The feature on the Home Page in QuickBooks does not mean it is helpful for every contractor.
It is not practical or recommended for the Small Contractor or Handyman to track inventory. For most contractors, the material goes from the supplier directly to the job, which is not the definition of inventory. Inventory is what goes into the warehouse and stays, and stays and stays.
Most contractors do not have the money to invest in inventory. Your supplier is just down the street. They have an on-demand list – what you need when you need it.
Plumbers, Electricians, and HVAC Contractors tend to have a certain amount of inventory, and it is better to do a physical inventory a couple of times a year (end of the year and maybe mid-point of the year and enter as bulk numbers). There are special programs that add to QuickBooks for those larger companies who need to track inventory. Most inventory programs only work with QuickBooks Enterprise.
Trying to keep track of each item can be overwhelming and not practical for smaller jobs. If it is a Cost+ or Time and Material job, then be sure you only purchase what you need and assign that receipt to that specific job.
Without a proper QuickBooks set up for your construction company, you:
- underbid projects
- earn little money
- often deal with unforeseen cash flow issues
- have no idea if your QuickBooks reports are reliable
When QuickBooks is set up right for your contracting business, you can now oversee what you have tracked. What gets measured gets managed. One excellent way to do this is through contractors' Five Key Performance Indicators (KPIs). These reports are useful regardless of your company size. KPI is a benchmark to measure how your construction company is performing. The five reports you review at 5 PM for five minutes is the best approach and accounting practice you could do each day.
Final thoughts
You can learn a lot from the customers who have left your business, both in terms of how you can win them back and how you can win over new clients. Take the time to survey them to find out why they left and what you could have done differently and make adjustments you feel are necessary.
Clean, easy-to-understand, reliable reports will streamline your accounting processes. Start identifying quality prospects and profitable projects and repeat the quality performances of your construction company.
About The Author:
Sharie DeHart, QPA is the co-founder of Business
Consulting And Accounting in Lynnwood, Washington. She is the
leading expert in managing outsourced construction bookkeeping and
accounting services companies and cash management accounting for
small construction companies across the USA. She encourages
Contractors and Construction Company Owners to stay current on
their tax obligations and offers insights on how to manage the
remaining cash flow to operate and grow their construction company
sales and profits so they can put more money in the bank. Call
1-800-361-1770 or sharie@fasteasyaccounting.com