How do I win back lost customers?

Aug 28, 2017 | Marketing Mondays, Strategy | 0 comments

Customer retention management is a tricky thing. Many businesses focus obsessively on bringing in new customers and forget about their existent ones. Because of this, they often lose the clientele they’ve already worked hard to gain because they show no interest in maintaining the relationship. Just like a romantic relationship, any person who is not paid attention to is easily wooed by another. When you only have eyes for new customers, it is easy for another business to swoop in and steal your existent ones.

How do we win them back?
All is not lost simply because a customer has left or lapsed. It is essential to go after those customers who you don’t want to lose and fight for their love one last time. After all, studies show that a customer will actually become more valuable to your business after being converted a second time. Here are a few tips on how to do that.

  1. Identify who is a lapsed user
    Before doing anything, you need to actually identify who is a lapsed customer. The definition of this will depend on the nature of your business. For a clothing brand this could be a lack of purchase within 6 months, but for a yoga studio this could be no visits within 2 months. The most important point here is to have a system in place that tracks your customer information and if possible automates the flagging of lapsed users based on a rule you set.
  2. Assess who is likely to return
    Trying to win back every lost customer is a waste of time and energy. Once you’ve collated a list of lapsed users, look at their history and identify who is actually likely to return. Key clues would be the duration of their relationship with your company, the rate at which they used to visit, their lifetime value for your business, when they last visited, and whether they had previously referred clients before. Clients who visited your business once years ago are generally not going to be a successful win-back, so it’s better to focus on people who were regular clients and dropped off recently.
  3. Create your offers
    Arm your sales people with a few different offers that would appeal to people who left for different reasons. Do not create a one size fits all promotion, as people leave for different reasons. Identify or assume the most common reasons and tailor offers to overcome them. Also try to identify trends within your lapsed consumers’ behavior. If they were customers of similar types of services or products, focus on those lines within your portfolio for your offers.Having multiple offers also allows you to test which types of win-back promotions seem to work better. You should also work out what the ROI would be on each offer to understand not only which promotions work best, but also which are the most profitable as this is an important consideration.
  4. Reach out
    This is the most important step. When reconnecting with customers, you must be ready to give and receive a substantial amount of information without taking up too much of their time. Remember, these are people who have chosen to leave your business so they may not want to spend much of their day chatting away with you.If you are able to connect with your lapsed users over the phone, do so in order to have a conversation in which you can find out why they left. Even if they decide not to return to your business, it is still valuable to understand why they left. This will help you avoid losing future customers.

    Train your sales people to offer a corresponding promotion based on the reason for leaving that would be tempting for the customer. If he complained about prices, some sort of discount could be a helpful option. But for products or services that are regularly purchased, the discount must make sense in a way that leads to a long term return by the customer, not a one off. If he complains about service quality, apologize and then offer an upgrade of some sort for his next visit. Blindly offering promotions that don’t solve the consumer’s problem will show that you are simply interested in his money and not in helping him.

  5. Do NOT communicate these promotions to everyone
    It is a waste of time and money to communicate win back promotions to your entire database. I have seen companies lazily post win back communication on social media platforms, their websites, and more which is a recipe for backlash. Firstly, without connecting with the target people directly you will most likely not actually reach them as someone who is no longer interested in your services probably does not follow your pages anyway. Secondly, once an active customer sees that you are offering promo rates that they are not eligible for, you will certainly hear an earful or in the worst case lose that customer out of indignation.

A thought that often crosses a business owner’s mind is: if I’m still growing with new customers, is it worthwhile to invest time in winning these lost customers back? The answer is yes, as otherwise your business becomes what is called a leaky bucket. You will never gain the full benefit of the work you are doing if you are constantly losing customers. After all, didn’t you originally work hard to win those customers over the first time?

Customer retention management is an effective use of your time, as they already know and have tried your brand, and often their reasons for leaving can be easily solved. Thus, the conversion rate of lapsed consumers vs. consumers who are unaware of your brand can be higher.

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