How to Win Customers Back in the Digital age?
How big would your business be if you had never lost a client?
Companies spend large sums of money replacing lost customers. However, new research shows that they will be better served by implementing winning back customer strategies before focusing on new customers.
- Kumar, a marketing professor at Georgia State University who studies “win back” strategies, cites three reasons companies should focus on winning back strategies. (Reference 1.0)
First, these people have demonstrated a need for the service, making them far better prospects than random names on a cold-call list.
Second, they are familiar with the company, eliminating the need to create brand awareness and educate them about the offering, thus reducing marketing costs.
Third and most important, recent technology, particularly more sophisticated customer databases, allows companies to draw on how people used their services the first time to craft more successful win-back offers and identify and go after the most profitable defectors.
It is also essential to know the reasons why we lose customers. There are primarily three reasons.
First, they no longer need the type of service or product you offer.
Ensure that you keep in touch and continue offering the same promotions and incentives you offer your active customers. For example, create aggressive and generous cash referral programs and let them know every time you have a different product.
Second, the client has decided to go with another company because they offered lower prices.
I have an unorthodox answer to this question. I believe that if you lose a customer regardless of the reason, including lower prices, it is always your fault.
My staff would always ask, how can it be our fault if they found something cheaper? I would always say the same; customers consider more affordable products due to our inability to impress them with the value we provide. Also, happy customers that experience unparalleled customer services and weight do not look for cheaper products. However, if they happen to stumble over a better deal, they will most likely call you before changing brands to give you a chance to fight for your business.
The third and most challenging to overcome is when you messed up, and you will.
When handling a complaint, the first question to ask is not what I can do to convince the client not to disparage my business online, but I cannot lose him. Companies invest millions of dollars to gain new customers and yet don’t have an aggressive service resolution process to reduce attrition.
Social Media is a great equalizer for customers that experience inadequate services, but it does not have to be the end of the world every time you receive a complaint or a bad review.
Be proactive; there are tools to help you monitor your reputation online. Finally, be dynamic; how fast you handle a complaint is often more critical than the complaint itself.
First and foremost, you must stop the bleeding. If possible, call the customer; it is 1000% more effective than an email or instant message. Start the call by apologizing for the hardship it has caused; even if you suspect that there is more to the story, take your beating, be sympathetic, and promise to investigate, and put a timeline on it.
Once a resolution is reached, the next question is, How Can We Bring Them Back? And more importantly, why should we try? You should try because an unhappy customer may cost a lot more money than you think.