Knowing when a customer is lost

- One of the most difficult questions to answer is this, how do you actually know when the customer relationship is over? Or more importantly, how do you define a lost customer in your business? Unless your business runs on a continuity model or a subscription pricing model, meaning you receive automatic payments on a regular basis, it can be a challenge to determine when a customer is lost. Consider a manufacturer of high-end jeans. If someone buys a pair of jeans on January 1st, is that person still considered a customer if they haven't bought another pair by March 24th or November 11th? What if it's been years since their last purchase? What about the customer who hasn't logged in to your iPhone app? Or the one who stopped coming to appointments and now isn't answering your calls? As you can see, it's a difficult question to answer, yet most organizations continue to spend the same amount to market to a customer from six years ago as they do for the one who bought six days ago. But this is how I answer the question and how I want you to think about it. A customer is only a customer based on the last time they purchased from you. So what you need to do is figure out the buying cycle or purchasing interval of your average customer. Here's what I mean. For a restaurant, you might decide that no customer should go longer than three months without a second visit. For an accountant, it might be the annual tax deadline. There is no one size fits all answer here. You need to look at your business, look at the history of your business, and consider the purchasing patterns of most of your customers. Then ask yourself, if a purchase is made today, at what point is the customer moved to the lost pile? And what steps will you take before that to ensure that they have made the next purchase? Because let's get real for a second. This is a course about winning back lost customers. I believe the best route is to engage in more preventative efforts to keep a customer before they're in the lost pile. This means that if you know a restaurant customer should visit every three months, you should be getting in touch before the third month and not after. So if you can take appropriate actions in the first place, you can save the customer before they're gone.