Recovering lost customers is only possible if you’re willing to find out why they left in the first place.
Unfortunately, many professionals are often clueless when it comes to understanding why their customer leaves. According to a study conducted by a firm, almost half of all sales managers believe that the primary reason that customers leave is that they found a lower price somewhere else. And another third believe that the primary reason is that the customer’s “needs changed.”
WRONG, WRONG, WRONG!!!
That same firm revealed that, when customers stop using a product or service, the reason is almost always either bad customer service (cited by 74 percent of respondents) or poor quality (cited 32 percent of respondents). Price was only an issue for only a quarter of the respondents, and product functionality (i.e. “needs changed”) came in at a measly 14 percent!
Blaming price and functionality makes it virtually impossible to re-acquire lost customers, because when you contact them, you’ll inevitably address the wrong issues. You’ll start talking about discounts.
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
When you’re looking to win back a customer, the first order of business, therefore, is to find out the REAL reason that the customer bailed. The ONLY way to do this is to summon up the courage to ask, honestly and humbly, with the full expectation that you might get an earful of unpleasantness.
Once you’ve figured out where you (or your firm) screwed up, then you can apologize and explain what’s changed since then to ensure that the customer will have a better experience. This is easier than you think, because even though the customer was annoyed enough to leave, there must have been SOMETHING about your firm that was appealing.
In many cases, former customers want to come back to the fold, providing the issue that caused them to leave is being addressed.
STEPS TO TAKE TO WIN BACK A LOST CLIENT
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 why
Customers don’t walk away without reason, so get to the heart of why this one left. Be honest with yourself. Conduct a strengths, weaknesses, opportunities and threats (or SWOT) analysis, assessing why your product or service was no longer perceived as having the best value.
What are the company’s weaknesses, especially in light of potential changes in the market?
Are you staying current, both in your pricing and level of service? Has the market moved beyond your capacity to stay competitive? How was your relationship with the client?
Look hard in the mirror for the underlying answers. And if you can’t be objective, put someone who was not on that account team on the case. This is not only an important first step to winning back your client; it’s critical in ensuring that more customers also do not depart.
3. 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.
4. Get it in writing
You need a plan of attack, and that means creating a written plan for winning back the customer. Lay out benchmarks and timelines for when to check in with the client. And don’t wait too long.
Too often companies make the mistake of waiting a year and a half to two years before reconnecting. That’s a mistake.
You need to find ways to stay on a client’s radar by politely touching base from time to time. And while that outreach may seem random to the client, it should be a well-timed part of your written strategy.
Don’t wait for your client to tire of the company that beat your firm. Find reasons to stay connected on a regular basis.
5. Request an exit interview
Ask for a meeting with the client to debrief you on the relationship. What were the factors that have gone into the company’s decision?
Don’t be defensive. Take responsibility and apologize, if appropriate. Use the meeting as a means for improving but also as a basis for learning more about your client’s needs. The new service provider may not be asking these questions, resulting in there being a potential opportunity down the road to try to win back the client.
6. Fire yourself not the firm
A great vendor-client relationship is often akin to dating or even a marriage. Sometimes the chemistry is just not there.
So ask the client, “Is it me?†Sometimes two companies are a good fit, but perhaps not the two owners in particular. You may need to fire yourself as the leader of the project for the sake of retaining the larger relationship. Asking this tricky question may lead to a much deeper and honest conversation that will lay the groundwork for winning back the client.
Finally, don’t become too emotional. Client churn is a part of the business experience, and once you accept that, however grudgingly, you will also understand that nothing is forever. Look at loss of a client as a new opportunity to regroup, learn and be able to deal with new client’s better.
7. Make them rethink doing business with you
Let customers know why it’s smart to do business with you again. Former customers want to feel they’re making the right decision in doing business with you again. Try to reinforce that decision throughout your relationship.
Preventing existing customers from leaving
You can ensure a current client doesn’t stop doing business even after just having a business transaction with them by doing proper after sales support.
Proper after sales support is the No. 1 way to keep customers from walking away to begin with.
The problem is some salespeople do a great job of selling until the prospect buys, and then everything changes. After the prospect takes ownership of the product or service, some salespeople become scarce.
If they do hear from the salesperson, it may be a casual, “Hey, how’s it going?†Then the customer, not wanting to cause conflict may say, “Pretty good,†but inside he or she may be steaming.
It’s always a good idea to schedule “check-ups†after a sale is made. These meetings can be formal or informal, and can take place face-to-face or over the phone. Not only are these post-sale check-ups effective for providing service after the sale, they should be talked about in the pre-sale stages to help in the closing.
Scheduling “post-buy meetings†before the closing sends a clear signal to prospects that you’re not going to run away and that a “partnership†is actually beginning. You’ll separate yourself from the competition by developing better strategies and processes for the after-sale process.