Where did my customers go?

Small business owners often see a plateau in customer growth at sometime during their business venture. As a small business owner you need to be prepared by having a financial plan in place that will help you during the slow times when customer growth slows. More importantly, you need to closely monitor your customer growth and be alert to signs of potential slowing. 

Although there is not ONE specific reason why this occurs, here are a few reasons we have observed why customer growth seems to slow. Of course, the reasons may be dependent on your business offerings, changes in the economy, and local changes in demographics where your business operates. 

• Competition - Chances are you have competitors that are competing for your customers. You should always scan the business environment that you operate in to identify potential competitors and how their offerings may impact your business. Some of our clients report that when they are successful they are soon joined by copycats - businesses that begin offering the same products and services they do. 
• Market saturation - Primarily for small businesses that operate in a small geographical area, there are times when your products and services may have reached their life cycle. Maybe you offer interior design services in a small area. After a few years you may find your customer growth slowing as you have met many of the customers needs. One of our clients began offering "interior tune-ups" to their past customers to allow them to grow their business during the slow time in the cycle. 
• Product/Service Maturity (our term which means the products/services you offer may have become common place or passed from popularity) - When offering limited products or services there will be a time when that product or service is no longer desired by the general public, your products become outdated, or the product becomes more common place. Many years ago when ceiling fans became popular there were ceiling fan shops everywhere. They offered all types of services from installation to balancing fan blades. Within a few years people learned how to install, balance and maintain their ceiling fans and the small businesses focused in that area began to close as their services were no longer needed. Video stores are another example where technology advances in On-Demand, and streaming video have caused the closing of many chain video rental stores. 
• Bad reputation - less common but prevalent enough to mention, there are times when a business develops a bad reputation among customers. When this happens, it is very difficult to recover as reputations, good and bad, often last a long time in customers memories. From our observations, we have seen businesses at the height of their growth develop bad reputations for customer service. When business is plentiful, some businesses reduce or abandon customer service knowing their customer base is growing. Avoid this at all costs!!!! Always offer great customer service because your reputation is what will grow your business. 

As a small business owner you need to continually scan your customer growth, competitors, and evaluate your products and services as to their potential for future growth.