Are You Mining Old Customers for New Business?

Over the past few weeks, I've spoken with more than 20 custom and showroom-based dealers of various shapes and sizes from all around the country.

When I asked, "How's business?" responses ranged from "challenging," "anemic" and "lethargic" to "depressing" and "downright abysmal."

Let there be no mistake: It's been tough out there in Dealerland. Everyone is looking for new business and searching for creative ways to make ends meet.

However, one dealer I spoke with actually reported vigorous sales results despite being in a state beset by housing woes and high energy costs. That dealer was Jeff Hoover, president of Audio Advisors in West Palm Beach, Florida.

How to Fill Up Customer Pipelines

Over the course of our conversation, he told me an amazing story that holds valuable lessons for all dealers struggling to re-fill dried up custom pipelines.

Last November, in the space of a few weeks, three very large Audio Advisors custom projects cancelled, totaling several million dollars. None of the cancellations had anything to do with the state of the economy.

One involved a customer who found out he had a terminal illness, one was a husband and wife who decided to divorce (so, they stopped building the house) and the third was a businessman going to jail for embezzlement and larceny.

The situation was dire. How could they possibly recover without incurring major damage to the company's successful infrastructure?

So what did Jeff Hoover do? First, he let go of 11 people (one job involved an extended stay for a large crew in St. Croix).

Then, he went back to basics and started a company-wide phone campaign to contact all previous customers -- not just from the previous year, but from several years past.

Within three months, their customers responded, the pipeline re-filled and business levels returned to their previous high levels.

Don't Overlook Your Customer Lists

If you're at a loss as to how to go about kick-starting sales, before you start spending money to advertise, think instead about spending the time and effort to create a disciplined campaign to mine your old customers for new business.

Any dealer who's been in business for several years has at least several hundred names on their customer list. These are people who already know, like and trust you.

What you will find is that after a few years, people's circumstances change -- kids leave for college, they're remodeling a room or they bought a vacation home.

Who doesn't want to hear about what's new and exciting in the world of home entertainment?

Remember, this is not a direct mail approach. It's a "reach-out-and-make-direct-contact" approach.

The goal is to engage them in conversation, find out if everything's working, suggest ideas, and try to get back in the home, where you can strengthen the relationship and offer even more possibilities.

It takes time and discipline. You need to make a plan to call, call, call, even when you're busy. But it works, and in a matter of months, your pipeline should start filling again with new business from old customers.

Why not give it a try? It worked for Jeff Hoover. It can work for you.