Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Holden Lewis – BB&T Capital Markets.
Holden Lewis – BB&T Capital Markets
I wanted to touch on some of the stuff in the supplemental information that you provide. Specifically, discuss a little bit more the decline in the customer base. You talked about gaining share but then we see continued significant declines in the customer base. Provide some color to that. And then secondly, if you could just talk about what that means coming out. One of your competitors has grown new account growth due to down turn and that would suggest they have more ammo once customers start ordering more. You in contrast are in a situation where there’s fewer customers ordering more. Does that limit your growth possibilities at all?
David Sandler
Let me talk a bit about what we’ve seen historically in our customer count and I guess as a reminder it really has been part of managing our growth investment, and really based on how we manage them, it’s been a proactive choice on our part.
Our team is constantly looking at where we can improve productivity with things like our direct marketing programs, so we reduce it or we adjust those dials based on how they’re meeting ROI thresholds. It’s an area that we continue to dig into by the way currently, so we’ve talked about our strategy.
The focus on acquiring those large customers with multi ship to locations and specifically trading those small one time buyers and really that’s how we’ve focused our programs accordingly. So the attrition that we’ve seen among these small customers have actually been the primary driver of the decline.
We’ve done more research that I’m able to share this quarter as our team has continued to dig in, and it shows that about 97% of those customers that actually purchased in ’08 that have since been lost or have not come, have an average size of about $500 annual spend in revenues, and the total loss from this entire pool of customers overall actually is what I consider to be not material.
So we also know that many of these customers are among businesses that are struggling in many ways to cope with the severe recession. They’re in the process of downsizing their inventories, conserving really every dollar they can. And we’ve had a lot of research in this area.
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