Let’s face it, every business loses customers regardless of how good a product or service is or how attentive a small business owner tries to be. The fact is, in this kind of economy there is tremendous pressure to seek the lowest possible price point and customer loyalty is hanging by a thread. Too often, however, small businesses concede the loss of their customers, focusing only on acquiring new customers and actively retaining their customers in good standing.
BizAssist has recently featured articles on both customer retention and cross-sell tactics, but what about winning back those customers who have moved on to supposedly greener pastures? If you aren’t putting considerable energy into winning back your lost customers, you’re ignoring a vital opportunity to shore up your revenue stream and solidify a relationship that could pay back renewed dividends over the long term.
Here are five “must-do’s” that BizAssist recommends for any effective customer win-back program:
- Gain the Insights – Do you know why your customer left in the first place? How are you tracking this information and developing a game plan to address it? If you don’t have the insight into why your customers are leaving, there’s little you can do to put a successful win-back program in place. Chances are there are distinct trends that you’re missing in your customer base. For example, your larger customers might be unhappy with your support levels, while smaller customers might feel that they aren’t getting the handholding they need during a tough economy. Identify the three most common causes of attrition and develop a specific win-back campaign for each.
- Don’t Win a Customer Back Using Only Price Breaks – It’s Sales and Marketing 101: price is the easiest way to undercut a competitor, but customers who bounce back and forth between different suppliers based solely on price are your least loyal customers. They are simply not worth the cost of re-acquiring and contribute to churn. Instead, a win-back program should seek to differentiate your solution on two major levels. First, you have to reposition your offering so the customer believes their experience will be different the second time around. Give customers reasons to believe and follow-through on your promises. Secondly, your win-back program has to clearly separate your solution from your competitors. Convincing your customers that you’re better than the competition is one hurdle, but convincing them you’re better than you used to be is even more challenging. Focus on service improvements, lifetime value and benefits that are important to the customer.
- Focus on High-Value Customers – It’s a no-brainer, but the usual 80/20 rule applies in win-back programs. Your business likely doesn’t have the bandwidth to attempt to reacquire all of your lost customers, so focus your energies on the top 20 percent who deliver 80 percent of your revenues.
- Don’t Promise What You Can’t Deliver – Conducting a win-back program is pointless if your business can’t honestly deliver what it’s committing to deliver. You can have the best intentions in the world when trying to lure customers back into the fold. However, if you haven’t made the investments to address their reasons for defection, it’s just costing you time and money that would be better invested in new customer acquisition activities. Base your win-back programs on realistic goals that you can achieve today.
- Closely Monitor the Results – Let’s say you’re successful in winning back a highly valued customer. Who on our team is ensuring that the business is delivering on its promises? Again, customers who agree to come back are in a highly vulnerable position: they’ve agreed to give you a second chance, but they are going to be ultra critical of any slip-ups and broken promises. It’s important to establish regular points of contact during the early stages of a renewed customer relationship, and to take pre-emptive steps to avoid making the same set of mistakes. If you can make good on your win-back platform, customers will deliver even greater lifetime value – use that as an opportunity to grow your business, not just recoup lost revenue.
Winning back customers is a tricky business, so consider your goals and your ability to execute carefully before investing in these programs. It’s worth it, though: a well-planned and targeted win-back program can add vital new life to your revenue stream when you need it most.