What a struggling church can teach business owners

How can you know what needs fixing if you don’t know why your customers or parishioners are leaving?

A few years ago, I was talking to a clergyman who was struggling with declining church attendance. We discussed the reasons for it, and I told him there wasn’t as much difference between a church and a business as he might think.

He was skeptical, so I put it to him this way: both businesses and churches depend on people. In business, we call them customers. In a church, they’re parishioners.

Obviously, a church isn’t a business. But if people stop coming through the doors of either one, the person in charge has a problem.

What struck me during that conversation was that the clergyman was dealing with many of the same questions I ask business owners when their companies are struggling. Who is still coming? Who has stopped coming? Are new people showing up? If they are, why aren’t they coming back?

I’ve seen too many business owners respond to falling sales by immediately cutting expenses. I think that’s often the wrong place to start. Before you cut anything, find out why customers aren’t buying, why prospects aren’t becoming customers and why former customers left.

Many businesses spend a great deal of time and money trying to attract new customers while taking their current ones for granted. Yet these are the people who already know you, have trusted you enough to give you their money and, hopefully, have had a good experience doing business with you.

Ask yourself whether you’re giving them enough reasons to return. Are you solving their problems? Are you providing good service? Is there something else they need that you could provide?

When sales decline, one of your first priorities should be keeping the good customers you already have. A church with a declining congregation would be foolish to spend all its energy attracting new members while ignoring the people already sitting in the pews. A business shouldn’t make that mistake either.

Then look at the people who showed an interest but never became customers.

Every business has them. They visit your website, phone for information, walk into your store, ask for a quote, respond to an advertisement or get referred by someone who knows you. Then they disappear.

Too many business owners have no idea why.

Is your website easy to understand? Do you respond quickly when someone contacts you? Do people know what you sell and what it costs? Do you make it easy for them to buy? Do they have a reason to trust you?

Before spending more money finding prospects, make sure you’re doing a good job turning the prospects you already have into customers.

I think former customers are one of the most overlooked opportunities in business. Companies spend money chasing people who have never bought from them while ignoring people who already know them and used to give them money.

If customers leave, ask them why.

Call five customers who haven’t done business with you in the last year and tell them you’ve noticed you haven’t seen them for a while. Ask if there’s a reason.

You might not like what they tell you. Maybe your service slipped. Perhaps your prices became uncompetitive. Maybe a competitor treated them better, you stopped carrying something they needed or their circumstances simply changed. In some cases, you may discover that you stopped communicating with them and gave them no particular reason to remain a customer.

If 30 people stopped attending a church, wouldn’t the clergyman want to know why? Why wouldn’t you want to know why 30 customers stopped buying from your business?

You won’t win everyone back, and sometimes customers leave for reasons you can’t control. But if several former customers give you the same reason for leaving, pay attention.

Of course, keeping customers isn’t enough. You also want them to do more business with you.

When I work with business owners, we look at ways to increase their average sale. If someone comes in to buy one item, could they also benefit from another product or service? Is there something better suited to their needs?

There’s nothing wrong with increasing the average sale, but I think there’s an even better question: How can we become more valuable to this customer?

If you can solve another problem, provide better service, save customers time or make their lives easier, there’s a good chance you’ll get more of their business. More importantly, you’ll give them a reason to keep coming back and perhaps recommend you to someone else.

If you want customers to keep coming back, don’t leave the relationship to chance. Know who your customers are, keep good customer records and, with their permission, communicate with them directly rather than relying on search engines or social media to bring them back.

Don’t confuse having followers with having customers.

When sales fall, struggling businesses often respond by cutting expenses. Service deteriorates, marketing is reduced and good employees become overworked or leave. Customers notice, sales fall again and management responds with another round of cuts.

Eventually, you can become very efficient at managing a shrinking business. Every business needs to control expenses, but you can’t cut your way to growth. Before eliminating something, ask whether customers value it and what will happen if it’s gone.

Finally, know your numbers.

Business owners sometimes tell me sales are “pretty good” or things are “a little slow.” That doesn’t tell me much. How many prospective customers contacted you last month? How many bought from you? How many existing customers came back? How much did they spend? How many customers stopped buying?

You don’t need expensive software to answer those questions, but you do need to know what’s happening in your business. Otherwise, you’re managing by feeling rather than facts.

I never bumped into that clergyman again, so I don’t know whether he managed to turn his church around. But I’ve often thought about our conversation and the lessons it holds for struggling business owners.

David Fuller, MBA, is a commercial realtor and award-winning business coach. A lifelong entrepreneur and author of Profit Yourself Healthy, he specializes in helping business leaders scale growth and manage succession.