The Costco Connection

How to spot a wavering customer

By Don Sadler

IT’S ONE OF the worst feelings a small-business owner will ever have: finding out that a longtime and profitable customer is leaving. “How did that happen, and why didn’t we see it coming?” is usually the first thought that comes to the owner’s mind.

The best way to avoid this painful scenario is to learn how to spot the early warning signs of a wavering customer, says Sherry Rahbar, a Costco member and a partner at Los Angeles–based CFO Edge ( cfoedge.com), a provider of outsourced CFO services. “Then, take action before it’s too late,” she adds.

For example, if customers have let it be known that they’re not happy with your products or service, this should be an obvious red flag. “Take action immediately to find out why your customer isn’t happy and then take steps to rectify the situation,” says Rahbar.

But unhappy customers don’t always voice their displeasure. Is a customer no longer returning your phone calls? Are their payments arriving late? Has the volume of their

tact person leaves and is replaced. “You don’t have a relationship with this new person, who might be ready to hire another vendor he or she is more familiar with,” Rahbar says. “So move quickly to establish a new relationship whenever your main contact person changes.” Also, if a new competitor enters your territory, immediately reach out to customers who might be vulnerable so they’re less likely to jump ship. “The same idea applies if an existing competitor rolls out new and improved or cheaper products or services,” says Rahbar.

Spotting wavering customers before it’s too late comes down to being proactive instead of reactive, Rahbar stresses. “All of your employees who have customer contact should be trained in how to recognize early warning signs like these, as well as what to do when these signs are spotted.” C

Don Sadler is an Atlanta-based freelance writer who specializes in small business.

orders gone down markedly? Or are they sending out other subtle signals that everything’s not going well, like changing their tone when they talk to you from friendly and chatty to more businesslike?

Another challenge is when a main con-

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