Death by a thousand slow cuts

We all think we know our customers, but how well do we really know them? Studies show that builders frequently visit merchants and come away with a significant proportion of their order - out of stock or just not stocked - unfulfilled. It can be 10, 15, 20 or even 25% of their requirement, but merchants may not see this because it doesn't generally appear in their statistics. The disappointed builder goes elsewhere. That means a lot of revenue draining away unseen while your rivals build profitable relationships with 'your' valued customers.

Let's call your customer Bill. Five or ten years ago you thought you knew Bill's business. But Bill's customers are not what they were. They've changed, so Bill's needs have changed to keep up with them.

You don't stock a certain paving product? Bill will have to get it at your competitor's. If he starts going there first because he's more likely to get what he wants, then they could end up with his brick and cement business too.

“But he was in last week,” you protest. Unfortunately, there's no comfort in Bill's occasional visits. While you still think he's a regular customer you're losing more and more of his business, without realising it, until he's buying 90% of his purchases from your competitors. With Bill's friends doing the same, your business will bleed away future sales and profits - it's death by a thousand cuts.

The good news is that, if you can identify what it is that Bill (and Tom and Mark and Dave) can't buy from you because you are out of stock, you can quickly boost your sales and profits at no extra cost. The challenge is to identify what you are losing, and that's something your internal sales data can't tell you.

Good research will tell you what they wanted to buy and where they had to go to get it. Research isn't 'rocket science' and it shouldn't be expensive. Nor is it something you should leave to your suppliers. It is just a basic tool that any business can, and needs to use to keep itself on track in a changing market. It's a tool that will help you win back Bill's lost sales before it's too late.

Who's doing most of this lost sales research and who does it best? Surprise, surprise; it's the DIY sheds! And who's winning a big chunk of lost trade business at the moment? Right again.

But why shouldn't it be you?