We’ve heard a lot of people talking about losing business but there hasn’t been as much discussion about where all those customers went. And that got me thinking about lost customers.
When the economy tanked in 2008, a lot of people adjusted their spending patterns. Maybe they put off certain purchases or they downgraded from one brand to another. So I started searching around the Internet to see what I could find.
The first thing I found was a study by The Griffin Group called the Winback Study. They ran one in 1999 and then another one in 2007—just before the meltdown. In the report, she says that the state of customer defection (at the time) was bad and getting worse. Well, we all know that turned out. I haven’t yet purchased her book Customer Winback, but I thought I’d provide my own list of thoughts on how to win back lost customers.
Want to read more about keeping customers? Check these out:
Why Care About Lost Customers
If we already know that a loyal customer is the most profitable customer and that a referred customer provides our best return on marketing—then lost customers certainly have more value than stone cold prospects.
A study done by Marketing Metrics says you have
- A 60 to 70 percent chance of successfully selling again to a current customer
- A 20 to 40 percent chance of winning back an ex-customer
- A 5 to 20 percent chance of turning a prospect into a customer
1. Decide if you want them back. Not every customer is an ideal customer. If the customer you lost was difficult to work with, then they may not be a good customer to have. The best thing you can do at that point, is to make sure that they are leaving happy and that they will continue to refer you.
2. Find out exactly why they left. If they are a customer that you want back, find out exactly why they left. If they say price then you know there is disconnect between what you offer and the value they perceive. No matter what the reason, ask at least two more probing questions to find out exactly what you could do to improve the offer. You may not get them back, but you will have information that you can use to save a customer who may be thinking of leaving.
3. Adjust your offer. Your lost customer research might uncover some information that you can use to create a new and more profitable offer for your customers. Document your existing offer and the price paid for that offer, then collect other offer and price combinations. You can survey your customers using a trade-off analysis technique called conjoint analysis.
4. Take responsibility. If you made a mistake to lose them ask them what they would need to have to make them stay. That means that you fix what went wrong with no requirement for them to remain as a customer. They may still choose to leave, but if they have a great last experience with you, they may refer you to friends and family who may be a better fit as a customer.
5. Ask for permission to send them industry information. Create a marketing list that is for special prospects and past customers. This list should be used to send information and education on industry topics that they are interested in. There is a terrific and unknown fulfillment service out there called Cyrano System that profiles your audience and then delivers information that they are interested in—no heavy sales involved, but keeps you in front of them.
Do an analysis on all the sales that you won and what it was about those customers that got them to choose you over any other alternative. Then dig into your lost customer list and take a look at why those customers left. Finally, don’t forget to match those lists against the competitive strengths of your organization. Don’t just take customers for the sake of having more customers. Focus on delivering on your brand promise and nurturing your customer experience. Only make adjustments that will further those two elements and make a positive impact on your bottom line.