Out of the Box

Reconnecting in a Recession

By Menachem Lubinsky on March 14 2009

A businessman I know approached me about my advice on picking up new business in these economic depressed times. He said that he was being stung by an unusual number of negative responses. Unusual, because he had a fairly decent track record of generating new business in the past.

Since I am generally of the opinion that businesses do not pay enough attention to old client/customers, I suggested that he embark on a program to reconnect with old customers. Together, we drafted a letter to his list of old customers, many of whom he had not done business with five years or more. Here are some excerpts from one of the letters:

Dear Paul:

Hope you are well. So much has changed since we last spoke that I decided to drop you a line to share some of my experiences with you. In these hard economic times, we are still working hard to produce a good product and deliver excellent service. I hope that you too are weathering these turbulent days by staying focused on good customer service…

Perhaps this would be an ideal time to reestablish our business relationship. After all, you already know our product and the excellent service we deliver. To help companies like yours, we made sure not to raise prices and we are even prepared to offer you an introductory 10% discount just for reconnecting…

I will call you in a few days to see how you are doing and hopefully help each other get through this recession…
In just two weeks, the entrepreneur mailed out over 125 letters, spoke to 35 of them and has secured seven of them as “new/old” business. In addition to the letters and the phone calls, he is also sending some of his former larger customers articles with tips of coping with the recession.

I have always felt that some of us are reticent about contacting former clients. There is perhaps an underlying anger that the customer or client chose to leave you. But experience has taught me that if the customer had a fairly good experience that they are only too happy to hear from former vendors, especially if there is something to entice them to return.

Most business development experts say that it is much harder to recruit a totally new business client or customer than it is to win an old client back. In his letter, the businessman made note of the fact that “you already know our product and the excellent service we deliver” as opposed to a total fresh introduction to a potential new skeptical client. Customers often change vendors because of price but over time the new purveyor may have also gone up in price and service may not be as expected. But as the saying goes “out of sight - out of mind” reduces the chances that they would go back to their original business.

A small accounting firm has for years mailed a newsletter with financial tips to its entire mailing list, including clients who have left the firm. Its most recent newsletter included a letter from the owner of the firm speaking about the need for trimming costs and offering a free consultation session “to any of our clients, current or former.” Four of the old clients took him up on his offer with two returning as clients. The accountant believes that it was as much that he stayed in tough through the newsletter as it was the special offer.

A payroll management company routinely distributes novelties to its clients during the holiday season. In 2007, it did not send the gifts to former clients, but in 2008 they did. The result was that in 07, only one of the old clients returned while in 08 thirteen returned.

My businessman friend had it right when he initially was skeptical about my approach. “Don’t you think that my old customers have also fallen on hard times?” he queried. True, but they are still buying and in these days many people look for the comfort level of dealing with the familiar. The end result was that
he managed to win back seven old customers.

He also wanted to include a line that sounded more like an emotional appeal than a business letter. The line read: “In times like these when all of us are suffering, it is important to rekindle old business relationships.” This line went against the grain of business acumen that messages should stick to the business tone. The opening lines cleverly alluded to the special times without sounding like an appeal letter.

While the gist of this article is to encourage reestablishing business relationships in a recession, there is a good reason to include frequent contact with all clients, former or current in every business climate. This can be accomplished through newsletters, sending out interesting business tidbits, and occasionally giving small gifts.

In today’s technologically advanced times, some companies have found new and creative ways to stay in touch with their clients. One company sponsors a monthly telephone conference on different business topics featuring a prominent business expert. The company says that it results in significant new business.

This may be the time to reevaluate your program to stay in touch with clients or customers. It may yield positive returns not only in the current recession but for years to come.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.