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, a
- 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
Don't write off customers that leave. With the right approach, you could get them back
Was it something you said? Something you did? Perhaps it was it them and not you. Still, they may have gone, but that doesn't mean your relationship has to be over for ever. There's always a chance you can get them back.
Ready for some bad news? Well, it's inevitable - your business will never be able to keep everyone happy all of the time. Darker forces are at work and they will lure customers away from your business to your competitors.
Issues around your customer service might arise and leave your customers unhappy, whether down to computer or human errors. It's naive to think everything will run smoothly all the time, even with the best intentions. Let's face it, everyone, including you, can have an off day.
But it's not just your company facing these challenges.
On average, most companies will lose between ten and 40 per cent of their customers. These are people who have walked away and may never return, and many companies don't even bother to find out why. The problem is, when you lose customers, you have to go out and find new ones to replace them - and that's costly and time-consuming.
Old customers make hot prospects
If you're still not quite convinced that it's worth the hassle of contacting people who won't necessarily make it easy for you, then consider this: the cost of winning back an old customer is far, far less than acquiring a new one. Economically it just makes sense.
Start off with the basics and make a list of all the customers who've dealt with you in the past but haven't come back within the past six months. Identify the ones you think will be most likely to come back and purchase again.
Here's the deal clincher: actually listen to what they have to say. If you're asking why they haven't purchased from you in a while, then the information they give you is vital to your customer relationship development strategies If you present yourself as a solution creator then they will be happy to listen to what you have to say. And don't forget the basics - have you been trying to reach them at an old address for example?
The first thing you need to decide if you want the customer 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.
If you do want the customer back, here are 12 surefire strategies that when you find yourself in the unenviable position of having egg on your face, you wipe it off and gently dab with a napkin instead of adding ketchup and salt and making an ugly situation even uglier.
Making Up Is Hard to Do (and without a plan it’s almost impossible)
It’s unacceptable to give the lost causes and hopeless cases to the new salesperson. Sales managers have to identify the lost list and get out of the office and visit them with their sales reps. During those meetings, sales management’s job is to listen, take notes and summarize the lost customers’ comments to demonstrate they are understood.
1. Sales Management Must Drive the Win-Back Program
SMART Training: Equips sales managers to plan for effective joint calls with salespeople with the objective of winning customers back.
2. Find Out What’s WrongThis seems obvious, but many and their salespeople neglect to ask one vitally important question: "What happened?"
It's not necessary to open with an apology, mostly because you won't know what you're sorry for, and those mea culpas often come across as insincere anyway. Instead, open a dialogue with the customer, listen to what they're saying, and get the you need to offer a solution.
SMART Training: Enables managers and representatives to proactively approach disgruntled customers.
3. Get to the Bottom of the ProblemOnce you discover why is unhappy, it's time to assess who, or what, is to blame for the problem. If a miscommunication occurred, for example, you'll want to acknowledge that you or one of your employees could have done a better job of articulating a specific policy.
You may know -- or think you know -- exactly what went wrong. Yet it's also important to ask the customer how they see the problem. They'll give you a different point of view, and in the process they might show you how to come up with a better solution. You'll also open a dialogue with the customer that shows how much you value and appreciate their input.
SMART Training: Teaches managers and representatives to conduct a effective needs analysis to discover the customer’s “hot buttons” and “points of pain.”
4. Own the Mistake
One thing that drives customers nuts and totally discredits you is to get defensive and blame everybody but your company. You spilled the milk, and you’re not only crying over it, you're blaming the cow. Empathically put yourself in the customer’s position. He hired or contracted with you and doesn’t want to hear about your problems with suppliers, truck breakdowns, or acts of God. When you took his or her money you became responsible for the total solution, so behave like it. This is basic to customer service procedures to resolve customer complaints.
SMART Training: Shows managers and representatives how to own the mistake and recover in a way that strengthens the relationship with the customer.
5. Solicit the customer’s recommended action.This is incredibly simple but ignored so often. Ask the customer what they would like you to do to make them whole again. Empower the customer with part of the solution. Make him part of the team, not an adversary. Remember, this customer is torqued off and he has definite ideas on what you should do as a remedy.
Customer recommendations are great for two reasons; first, making the customer part of the solution takes the edge out of their complaints, and second, you just may find answers that you weren’t aware of or that are less painful to your company than your solution would be. Companies that excel in customer service solicit these opinions and, if at all possible, implement them. At least they listen.
SMART Training: Demonstrates to sales managers and representatives a powerful three-part formula for “partnering” with customers to create a mutually beneficial solution.
6. Calibrate Your Language (and Your Tone)If you want to convince someone to give you a second chance, use language that not only persuades but also enhances your trustworthiness and real concern.
Most people, especially disgruntled ones, can spot insincerity a mile away. That's why it's important to make sure that the sincerity in your voice and body language matches the sincerity of your words.
This isn't always easy to do, especially if you're in a situation where emotions are running high. Just remember that staying calm and being patient doesn't only calm the customer, it also calms you and helps you focus on finding a productive solution.
SMART Training: Helps sales managers and representatives create and deliver a message that compels customers to give them a second chance.
7. Make it right—and then some.
At some point, you eventually have to deliver on the promise. You might be late or over budget, but the bottom line is that you’d better ultimately make it right. The problem is that this is where most businesses stop. You see, they promise X but X was tougher to deliver than they thought, so after a while the customer gets poor X--tired, disheveled, and late.
The savvy company knows that for whatever reason he has been inconvenienced in trying to bring about the elusive X, the customer has been more inconvenienced. This best customer service practice company delivers X+ something else. This isn’t an algebra class, but it really is that simple.
SMART Training: Equips sales managers to examine and improve the company’s value proposition at each stage of the buying cycle and at every customer touch point.
8. Offer a Specific Plan of Action
Once you've made it clear that you understand what went wrong and why the customer is unhappy, offer a specific strategy to make things right. Vague assurances are exactly that: vague. You're far more likely to win over an upset customer if you present them with a specific solution to the problem.
SMART Training: Teaches sales managers and representatives techniques for rapidly reinstating the customer’s trust.
9. Empower Your SalespeopleIf you want to solve customer service issues, you've got to give your employees the power to fix problems and make things right. That's especially true when it comes to dealing with unhappy customers.
If you're the only one who can make the big decision to, say, give a customer some kind of break, you're sabotaging your own customer service efforts. Your sales representatives are often the first people to deal with an unhappy customer, and if they can't address the issue on the spot using their own best judgment, your might not get another chance.
SMART Training: Enables sales managers how to effectively coach representatives to apply simple techniques that will provide exceptional service and recover from a service breakdown.
10. Launch a "Win Back Customers" CampaignAssemble your sales team and create a campaign just for previous customers, particularly ones who left disgruntled or otherwise unhappy. Conduct the campaign to make sure you reach everyone. Tell customers you miss them and want to do something -- whatever it takes -- to get them back.
The deals you present could involve price breaks, special incentives, product guarantees, or offers tailored specifically to address ex-customers' concerns. Whatever you do, make sure you also offer incentives to your sales team, since they'll be doing the heavy lifting on this effort.
SMART Training: Teaches sales managers how to coordinate and equip their representatives to conduct an effective win-back campaign.
11. Work through the Customer's AngerAt first, an unhappy customer who hears, "What would you like us to do?" or "How can we make the situation right?" might not actually pay attention. They may be so accustomed to being ignored that they won't notice that you're working hard to engage him and find a solution.
But be persistent. If a customer requests something that is truly beyond your abilities, gently negotiate toward a middle point. Most customers will appreciate the effort, even if it takes them a few minutes to get over their initial anger and feelings that the trust was broken.
SMART Training: Instructs sales managers and representatives how to become a “human bomb squad” and effectively use the “Triple A” approach for diffusing potentially volatile meetings with lost customers.
12 Seal the DealOnce you win back that unhappy customer, do your best to keep them. Start out at once by expressing your appreciation, and never stop. Remind yourself from time to time why became disgruntled in the first place. The last thing you want is to have to woo back an unhappy customer a second time!
SMART Training: Teaches the sales team tips for making their company customer defection proof.
To Your Greater Success!
Peter Mclees, Principal