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Why Do You Lose Accounts?

Howard Scott |

Do you ever take time to analyze why you lose accounts? The exercise might be instructive — you might discover a problem of which you hadn’t been aware, and be able to take corrective action against it.
You could find out that one of your drop stores or a single counter shift is responsible for more than its share of losses. You might even be able to point to a single employee who causes the lion’s share of the problems.
Too often, a harried owner thinks he knows why he lost an account. Specific incidents stick in his mind — Mrs. Harris left because a dress was lost, the Solomon family got mad because you wouldn’t refund the full value of a ruined garment, the Izeakians left because a delivery wasn’t there on time.
You may not want to revisit these incidents, preferring instead to dig in your heels and move forward, determined not to make the same errors again. But looking into the problem will produce hard information — and make these issues less personal.
Call up several accounts you haven’t heard from in six months — your point-of-sale system can help you find them — and ask why they left. Stop when you get 20 good answers. These will be hard calls to make, of course, because they will expose your vulnerability and may force ex-customers to say hurtful things.
“Hello, Mrs. Summerfield, I notice that you haven’t dealt with us for a while, and I assume it’s because we did something to annoy you,” you might say. “Please be blunt and tell me what we did wrong. I’m just trying to find out if we made an error.”
Never dispute the individual’s explanation. Instead, say “Thank you for being frank,” and mark down the answers. This is research, not sales — but there will be time for sales later.
After about 30 calls, you’ll probably have your 20 individual explanations of why an account left. Look over the reasons and put them into categories. Perhaps one frequent complaint involves prices. Another problem might be shoddy workmanship. Another might be deteriorating or low quality.
You might get an explanation involving a stain that persisted after cleaning. Another reason might be slow service. And then, there might be unpleasant personal encounters with staffers. Lay out the results in a graph: 30% of people left because of __, 20% left because of __, and so on.
In the privacy of your office, think about the findings. Are you losing too many customers because of lost garments? Is your spotting department weak on the fundamentals? Is there a lot of miscommunication between counter staffers and customers? Are your prices a big factor, prompting customers to go elsewhere to shop for a better deal?
Determine how many customers is too many to lose. If you find that 50% of customers leave because of high prices and your goal is customer retention, you might need to look at your pricing. There may be area operators who charge less for similar levels of quality and service.
Fortunately, where can define a problem, there’s usually a solution. You could improve garment-retrieval systems so that your plant loses fewer garments. A double-check in assembly might be necessary. Your spotter could take a refresher course to improve his techniques.
Manufacturers could visit your plant and demonstrate new cleaning strategies. You could institute a service school for your staffers. Or you could install a pricing plan that offers discounts to steady customers — a 20% frequent-shopper reward, perhaps.
If pricing is the issue, you might run a weekly special featuring a heavy discount on a single type of garment: Week 1, 33% off shirts; week 2, 33% off suits; week 3, 33% off dresses; etc. This will help get lapsed customers to gather their cleaning and take advantage of the deals, retaining the most price-conscious.
Start with the most common reason for leaving and attempt to improve results. If 40% of disaffected customers left because of a counter confrontation, put your staffers through a rigorous training program, while making sure you always remain cheerful and pleasant yourself.
Afterward, see how the situation has changed. Inspect your records to see if there are fewer customer departures. When performance has improved (i.e. fewer customers are lost because of that reason), attack the second problem.
When a solution is in place and the results noted, try to win back lost accounts. Call lapsed and lost customers and ask for another chance: “I know we had rude staffers six months ago, but we’ve reformed our ways,” you’ll say. “Now, everything goes through me, and my staffers are more customer-focused and friendly. I know that sounds like a cliché, but if you walked in here, you’d sense the difference. Give us another try. I’d appreciate the opportunity.”
These calls are hard to make. But everyone — and especially a disgruntled customer — wants to talk to the boss, so you’re the best person to make them. If you just can’t bring yourself to make the effort, appoint your general manager to perform the study; he or she has sufficient authority. Don’t appoint a staffer to make these calls, though — it will look like you’ve passed off your dirty work on an underling.
In addition to finding solutions to the business’ weakest areas, the research will help you better understand your customers. Knowing where your weaknesses lie is a leg up on your competitors, who likely only react to the moment. You’re better than them — you think about your operation and improve it constantly. Make it sing.
 

About the author

Howard Scott

H&R Block

Industry Writer, Drycleaning Consultant, and H&R Block Tax Preparer

Howard Scott is a longtime industry writer and drycleaning consultant, and an H&R Block tax preparer specializing in small businesses. He welcomes questions and comments, and can be reached by writing Howard Scott, Dancing Hill, Pembroke, MA 02359.

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