• Alison Folwell

KPI Spotlight Feature: Dormant Customers

Creating opportunities from data - how to make more of your dormant customers

They say that knowledge is power, and when it comes to business, that’s absolutely key. Your ERP system should be your best friend when it comes to information – and the easier it is to access and understand, the easier it is to apply the insights and learnings to make profitable, efficiency-driving decisions to help your business grow.

Three simple steps to success

Step 1 is having the information available in the first place.

Step 2 is understanding what that information really means, in real terms, to identify challenges and opportunities

Step 3 is applying those insights and turning them into action for long term success

KPI Feature Spotlight on….Dormant Customers

Understanding customer behaviour is key to igniting sales. UT400 show you a number of different metrics about your customer base; active, inactive, on hold, over credit, on stop and more. Today we’re looking at dormant customers – those customers who have ordered from you relatively recently but haven’t done so lately.

What can your Dormant Customers figure tell you?

As with all stats, it’s most useful to look at this metric in relation to others. There are several questions you might ask yourself,. For example:

- How many are there?

- Why have they lapsed?

- Is there a pattern or trend in the sorts of customers which have become dormant? E.g. domestic versus trade; buyers of particularly product lines; particular sizes or locations?

- How does your dormant figure compare with active or inactive?

- Has it changed significantly over time?

- Are there peaks or troughs at particular times of year?

- Has any recent activity affected the dormant customer figure, either positively or negatively?

- What is the size of the opportunity if you re-engaged your dormant customers?

How to put information insight into action

Knowing the numbers is step 1. Understanding why the number is where it is, how it changes over time, and what you can do about it, are where things get interesting.

If your dormant customer number is very high, perhaps there is more you can do to regularly keep in touch with your customer base using a customer relationship management (CRM) system. UT400 offers plenty of automation features to help with sending prompts and reminders, so it doesn’t have to take up too much time – but it could make a big difference to your bottom line.

Dormant customers have bought from you in the relatively recent past, so there should be no reason they won’t buy from you again. Here are just a few things you could do to make some quick wins:

- Email dormant customers to remind them you’re there, or to promote a new product or service (e.g. online or click and collect)

- Phone dormant customers to ask if there’s anything they need

- Send them a copy of your new brochure or newsletter

- Take the time to ask them WHY they haven’t ordered recently – sometimes the information you get from a research exercise is worth more in the long run than a quick sale!

- Tempt them back with a limited time offer or loyalty scheme

- Communicate new, more sustainable or improved product options

And remember, when contacting customers:

- Make it personal! Show them you remember them and value your business by customising your communications. A phone call or individual email can be more powerful than a bulk email campaign

- Be aware of why they might have lapsed – did something go wrong last time? It pays to do some digging before you contact someone so you can pre-empt and overcome any objections they might have

- Be relevant. If they used to buy timber from you and timber alone, it’s not necessarily wise to just offer them your new range of patio slabs. Equally, if they’ve only ever ordered single items, they’re unlikely to want a warehouse-ful!

It’s easy to be overwhelmed by information and to end up not being able to see the wood for the trees. We hope that by covering these KPIs in more detail it will help you to get more value from your ERP system. If you ever have any questions about UT400, KPIs or analytics in general, we’d be delighted to help.