The Customer Cycle — and How to Treat Them at Every Phase.

Q: I guess I am not alone when I say that I was surprised when I lost one of my biggest clients recently. It seems that everyone I talk to has similar stories. How can I prevent this from happening again in the future?
Sally J., Akron, OH

A: You can't. Clients and customers come and go. That's a fact of business life. There are few things that you can bank on when you are a small businessperson, but one of them is this: customers and clients will leave.

Why do customers leave? Consider these statistics from an SBA survey:

• 4% of customers leave a business because they have moved away
• 5% change their purchasing habits
• 9% decide that they like the competition better
• 14% leave because they become disenchanted with a company's overall service
• Fully 68% stop doing business with a company because they feel unappreciated

It follows then that you should do everything in your power to try and keep your customers happy, and from the evidence above, making them feel appreciated should be a top concern. But even doing that will not alter the fact that some customers will still leave you.

That is why the smart entrepreneur will understand that every business actually has three different sorts of customers, all of whom must be handled correctly. New customers, existing customers, and exiting customers.

1. New customers: Creating new customers is an ongoing process, and is one of the fun aspects of business. Many an entrepreneur enjoys spending their time figuring out ways to lure in new business. Where many drop the ball, however, is after the initial sale. Flush with success, the new entrepreneur often neglects the new customer after that sale, inadvertently failing to realize that their new customer may become a valued customer only if treated properly. You turn those new customers into returning customers by treating them well from the start.

2. Existing customers: Existing customers are one of your most valuable business assets and so cannot be taken for granted. They usually make up the bulk of your business and so it is incumbent upon you to nurture those relationships and let customers know how important they are. Existing customers should be given special services and discounts when appropriate, and otherwise shown appreciation for their patronage.

3. Exiting customers: Finally, all businesses will have customers who are ending their relationship for one reason or another, and even these customers need special treatment. It may be that the relationship is ending, as that is the natural course of the relationship. For example, a chiropractic patient who is ending his care, or the customer who is moving away. As you never know whom they talk to, or whom they may refer to you, these customers need to be cared for just as well as the others. As old customers leave, you need to constantly be bringing in new customers to take their place, and as you do that, you need to be converting your new customers into existing, loyal customers. This important cycle of your business cannot be ignored. Old customers will leave (because they do), and if there are no new customers coming in to pick up the slack, you will soon be out of business.

The lesson is clear then: Unless you want to lose the bulk of your hard-earned customers, you better make sure they know that you appreciate their patronage.