YOUR BIGGEST CUSTOMER HAS DECIDED TO CANCEL

Now that we have your attention, this is a reminder to take good care of your largest customers. The first step in doing so is to know who they are. Rank them by gross profit -- in dollars and percentage of total revenue. See the Delphi Corp. example at the bottom.

As you can see, Abrams has contributed $192,000 in gross profit so far this year. That's 16% of total gross profit earned by the company. And, for comparison purposes, the $192,000 earned from Abrams so far this year far exceeds the $132,000 in total year-to-date operating profit. So if Abrams were lost, Delphi would post a net loss.

Sobering? You bet.

Run your own numbers. Update them regularly and place them on the wall for everyone in your office to see. Review them at your regular staff meetings. When Abrams calls, the entire office should spring into action. Same for Z-Tech, Davis Brothers, et al.

Now let's look at the brighter side. That someone is a repeat customer tells you three important things:

1.    They know you, your products and your reputation. You don't have to spend time and money introducing your company to them.

2.    They have a proven interest and need for your products or services. After all, they have ordered from you before.

3.    You know something about them -- their creditworthiness and their pattern of paying their bills.

To be sure, you have a bird in the hand. To grow your business, you want to find additional customers, but let's not neglect this bird in the hand. Maintaining a customer is much more profitable than searching out and winning new ones.

But let's go even further than that. You've heard of the pendulum theory. The pendulum always swings; never stands still. Similarly, in your business, relationships with your key customers never stand still. Your relationships are either getting stronger or weaker. And if you are not sure which it is, they're getting weaker. So the best way to keep a good customer is to work on strengthening and growing your business with that customer. Here are some suggestions.

Establish and Maintain Multiple Points of Communication: With important customers, you want strong connections with multiple people in their organization: owners, managers, accountants, buyers, salespeople. You want people who will be champions for your firm and also provide feedback/intelligence.

Make it easy for them to order. Simplify your order forms and establish

a toll-free number. Practice your team's skill in handling order intake with speed, effectiveness, flair -- and up-sell whenever possible.

Serve and Sell: Repeat customers are special. You have a relationship of trust. Serve them actively in various ways, including with your products. Again, they trust you. They depend on you -- largely for products and services you provide. So be confident. Offer them more products. Review ideas with them for new products and services. Inform them of specials and discounts. Your existing customers are a known commodity. Go after them for more business.

Respond immediately to problems and complaints: Complaints are wonderful things. They provide business intelligence. The alternative is customers who are so frustrated or irritated that they simply cancel without telling you why. So when you get a complaint, thank them and ask them how you can correct the problem and make them happy again.

The bottom line? Be proactive. Don't be the person who gets the cancellation call and is shocked. If you stay in touch with your customers and clients, then you should anticipate and deal with problems before they come home to roost. This way, you can react and protect your interests -- and those of your customers and clients.

Delphi Corp.'s Largest Customers

By Gross Profit