Have you ever sat down for coffee with a former client and had a conversation about why she didn’t return? At first blush, the thought of sitting down with people who no longer patronize your business can seem uncomfortable, embarrassing and unnecessary. However, when you truly understand how these conversations can improve your business, you may reconsider. Understanding customer feedback, even criticism, can help improve your retention rates. Further, it is widely understood that marketing and advertising for new customers is far more expensive than marketing to existing clients. So if business owners understand that those past customers can serve as a low- to no-cost strategy for improving customer relations, they just need to know how to successfully structure those opportunities.
Leaders in the management consulting industry agree that meeting with former clients provide immense value. "Part of what we cover in Interise’s StreetWise ‘MBA’™ curriculum is the importance of customer feedback," says Interise CEO Jean Horstman. (Full disclosure: I’m an instructor for Interise’s program.) "We ask business owners to interview current and lost clients. We cover this because it's something they've seldom done. Business owners report to us the number of customers they win back through interviews. This really shows the power of it."
The Value of Customer Questionnaires
What are some topics that you can cover in your interviews that can help provide you with valuable course correction strategies? You can take the opportunity to ask about common factors such as price, location and quality of the product.
However, you may not want to overlook communication and responsiveness. Lack of communication is a common reason why customers do not return to a business. Interise participant and business owner Ann Williams of R&A Movers asked a former client why they lost their business. The answer was very illuminating. The client admitted that it went with a competitor with a lower price, however, they admitted on the call that they regretted that decision. Williams said the client missed how responsive R&A Movers was to its needs.
Ultimately she was able to win back the business, not only because she reached out due to the questionnaire, but more importantly, she learned that she had developed a brand and reputation for responsiveness. Make sure your questionnaire is probative on this important characteristic.
Retaining Former Customers Versus Marketing to a New One
Another team member in Interise's program also sought information from a lost client. She mentioned that while the initial outreach was a bit uncomfortable, it provided her with feedback that she would not have otherwise received from her staff.
This business owner had a personal delivery services business. Her lost client mentioned that at times her employees weren't timely with pickups and drop-offs. While the owner noted that the customer was late on occasion as well, the feedback from the customer allowed her to make balanced decisions in the future.
Further, the owner also completed a calculation of how profitable this client was. She could quantify the value of retaining that customer versus recruiting new customers with large scale ads and marketing promotions. Ultimately their conversation opened communication lines and salvaged a very profitable and long standing relationship.
Customer Feedback As an 'Internal Yelp'
Think of former clients like they're your own internal Yelp of feedback—except without the headache of negative feedback going out to potential customers. It seems to be human nature that customers like to “vent.” If you create an effective communication system for unhappy clients to explain in detail when they were unsatisfied with your business, you're also creating your own crisis management division. Allowing that communication to be heard and respected can be both cost effective and an efficient way of keeping complaints discreet.
Client interviews and customer feedback, when done in a personal and insightful way, can help a business’s bottom line. Turning customers into fans and advocates can be done with quality services, communication and professionalism that starts with honest conversations about the strengths and areas of improvement for your business.
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