Ask the Experts: How Do We Keep Our Original Customer Base?

Last Updated Aug 16, 2011 2:34 PM EDT

By Harper Willis

The Owner: Mitch Goldstone

Annual Revenue: $2.5 million

The Problem: Mitch Goldstone and his partner Carl Berman started Orange County, Calif.-based store ScanMyPhotos in 1990. They offered super-fast photo scanning, up to 1,000 photos in five minutes. Over the next 10 years, their local customer base grew but so did their national sales. "People would come to us from all over the country," says Goldstone. "Someone once brought us 24,000 photos, which we scanned for them in less than a day."

They launched a website in 1998, and soon after, 40% of their business was being done online. "As technology progressed, and digital cameras and smart phones started to replace traditional cameras, we did more business online and our retail sales dropped," says Goldstone.

Around 2005, sales dropped to around $200,000, which was lower than they'd ever been. Goldstone knew it was time to think about closing down the store, but he didn't quite have the confidence to go 100% digital.

That changed in 2008, when ScanMyPhotos got its big break. David Pogue positively reviewed the service in his New York Times technology blog, which gave the company 40,000 hits to its website -- overnight. "This review led to scores of other reviews, and our digital sales exploded," says Goldstone.

The company finally shut down the retail store in July 2011, and moved to a large corporate office down the block. An agreement with their old landlord allows them to keep a sign on their old store's door explaining the move.

The choice made financial sense. They were already doing 90% of their sales online and the retail store wasn't pulling its weight. Still, Goldstone is concerned that shutting down the store is going to cost him his most loyal customers and sever his connection with the community.

"We spent 21 years developing a presence in our community and winning over thousands of die-hard loyal customers. I don't want them see our empty retail location and think we've gone out of business," says Goldstone. "They may not make up a big percentage of our sales at the moment, but in some ways those customers are the foundation of our business."

Goldstone has explained the move on his website, but he wants to know what else he can do. "How can I make sure I don't lose touch with our community and our old customers now that we've gone digital?"

What the Experts Said
Here's how you make the experience not only comfortable, but also enjoyable and positive to your consumers: First, the change must have a positive tone. Use the sign outside your retail store to point out benefits like having more resources to focus on product ease and improvement, more accessibility (now every home can be your own personal retail outlet), and more efficiency, just to name a few. Second, you must develop and implement a bridge period. Consider creating a tutorial on your website walking new customers through the process of using the website. Finally, it is up to you to recognize, and support your customers as they transition.

-- Frederick West III, CEO, Enterprise Solutions International
Communicate with your local customers where they already are -- offline -- while also making the transition simple and effortless for them.

Start with a mailing to your current local customer list and other targeted homes in the area surrounding your old building. Use bright, large-print postcards or specialty materials to inform patrons of the new direction your company has taken and give them an incentive to try your virtual services online with a special time-sensitive offer, such as a free gift, coupon, or discount. You might provide them postage-paid shipping materials, so as to make the transition as easy as possible. Be sure to spell out how to order online in a 1-2-3 step fashion. Repeat this mailing anywhere from three to 12 times for maximum exposure.

Then, in addition to posting a sign your old storefront window, drop off a stack of these same postcards for the current tenant to pass out to customers stopping in to look for you.

Finally, sponsor, or exhibit at, local antique and resale events where you'll have direct access to residents who tend to hang on to household items. This crowd is likely to have stores of photographs that need scanning.

-- Katherine DalPra, CEO, The Online Close