A 12-Point Plan for Winning Back Lost Customers

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 Paramus, New Jersey-based consulting firm 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

In the rush to get new business, we ignore lost business. Marketing Metrics, estimates that the closing ratio for new prospects is 5 percent to 20 percent. The potential for winning back lost customers is 20 percent to 40 percent.


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

Let's not get too negative about it though. Remember that it's far easier to sell to someone who has dealt with your business before than it is to a new prospect. While a bunch of flowers or a night out at a favorite restaurant may work you back into the affections of your partner, in business that's just not going to cut it. It's time to look at successful strategies and campaigns that will win back even the most disillusioned of customers.

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.

  12 SMART Ways to Win Back “Lost” Customers
Making Up Is Hard to Do (and without a plan it’s almost impossible)

1. Sales Management Must Drive the Win-Back Program

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.


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 Wrong

This seems obvious, but many sales managers 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 information you need to offer a solution.


SMART Training: Enables managers and representatives to proactively approach disgruntled customers.

3. Get to the Bottom of the Problem

Once you discover why your customer 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 Salespeople

If 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 company 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" Campaign

Assemble 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 Anger

At 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 Deal

Once 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 your customer 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

http://smartdevelopmentinc.com

8 Things You Never Want to Say to a Customer

Great customer relationships: Hard to establish, easy to ruin — especially when you say the wrong things.

Here are eight things you should never say to customers (even if you would secretly love to): 


1. “No.” A manager once told me, “Never tell a customer no. Always say, ‘Yes, we can. Here’s what that will cost.’” If you absolutely can’t provide a certain product or service, you can’t, but often you can’t simply because you don’t want to. (In the example above I didn’t want to. What the customer had asked for was certainly possible but would  have been a real pain to pull off.) Price unusual requests accordingly: If you can make a decent profit, why not?

Making a profit is why you’re in business.

2. “Are you sure?” Customers are often wrong. Too bad. Never directly doubt their statements or their feelings; all you’ll do is make an already bad situation a lot worse. Instead ask questions or seek to better understand. Saying something like, “Can you walk me through that one more time so I can make sure I can take care of what went wrong?”

Validates the customer’s position while helping you keep the conversation objective andsolution-focused.

3. “What you should do is…” Don’t tell me what to do. Help me. That’s why I came to you.

4. “That’s against our policy.” Maybe it is against your policy… but if the customer wasn’t aware of the policy ahead of time, who cares? Any terms or conditions not spelled out in advance are irrelevant to the customer. Imagine you’re a customer who finds out after the fact that special order items can’t be returned — how would you feel? Refer to policies or conditions when the customer was fully aware of and agreed to those conditions; otherwise, find a way to fix the problem. Unstated policies are your problem, not the customer’s.

5. “No problem.” Maybe this is just a pet peeve, but I’m always irritated when, say, I ask a waiter for dressing on the side and he says, “No problem.” I know he means “yes,” but “no problem” still implies I really am causing a problem. When I’m the customer, I’m favoring your business with my patronage; your business isn’t doing me any favors, so never imply you are. Replace “no problem” with “yes.”

6. “Let me try to do that…” Customers care about results, not effort. Tell me what you will do. “Trying” creates greater uncertainty, and uncertainty is the kiss of death to a customer relationship. If a client requests an accelerated delivery, say, “I’ll call our distributor and get the best schedule possible.” All you can do is all you  can do. Don’t imply you’re working extra hard on my behalf by “trying.”


7. “Let me know if you have any other problems.” If a customer comes to you with a problem and you think you’ve resolved that problem, great. But don’t expect the customer to contact you if other issues pop up; follow up a couple days later to make sure all is still well. Solving a customer’s problem meets expectations; following up to see if they need further assistance shows you care.

8. “I’ll get back to you as soon as I can.” Maybe you will… but in the meantime the customer is left wondering what “soon” means. Always specify a time. If, when that time comes, you still don’t have all the information you need, contact the customer and say so — and say when you’ll follow up again. Customer relationships are based on managing expectations; “as soon as I can” sounds good but fails to set an expectation the customer can count on.

To Your Greater Success!

Peter Mclees, MS LMFT
Principal

P. S. Smart Development Inc. has an exceptional track record helping restaurants, stores and other businesses create a strong culture, leadership bench strength and the teamwork necessary for growth. Having worked with several companies throughout their growth cycle, we have valuable insights and strategies that would help any late stage startup, small or medium sized company achieve sustained growth and prosperity.

http://smartdevelopmentinc.com/

 

The 4 Competencies for Making the Super Fan Customer

Successful businesses as diverse as the Trader Joe’s Company, The Container Store, IKEA, The Four Seasons Hotels, Zappos Shoes, Service Masters, PrairieStone Pharmacy, Harrah’s Entertainment, ING, Harley Davidson, Baptist Healthcare, Mary Kay Cosmetics, Rackspace Storage and Patagonia have all been cited in the business press as the few in their industries worthy of the being called customer-centric companies. Only truly customer-centric companies can create a level of customer loyalty that defines a rare breed of customer—the super fan. These customers are devoted to the company in the way sports fans are to their favorite team.

Super fan customers are highest on the “loyalty ladder.”[1] Super fans have also been called, “advocates,” “confidants,” “customer-owners,” “apostle,” “brand ambassadors,” “raving fans,” or simply “highly engaged customers.” Whatever name you apply to this special group of customers, companies that create and sustain this level of customer devotion realize much higher financial returns than their competitors.

Robert Passifoff, president of Brand Keys has captured the great monetary value that comes from super fans in a principle he calls, the “Rule of Six.” Passifoff asserts, “a true advocate—you’re basically talking about your top 20% of customers—are six times more likely to buy things from you. They’re six times more likely to recommend you. They’re six times more likely to invest in you if you’re a publicly traded company. And they’re six times more likely to rebuff competitive offers, especially if they’re only based on price.”

Getting shoppers to move up the loyalty ladder to the “super fan” or “advocate” level requires that companies develop and master four customer-centric competencies:

1.   Purposeful Leadership: Operate consistently with a clear set of values.

2.   Employee Engagement: Align employees with the goals of the company.

3.   Compelling Brand Values: Deliver on your brand promises to customers.

4.   Customer Connectedness: Infuse customer insights across the company.

Companies that want to become customer experience leaders need to master four customer experience competencies. Research has shown that two-thirds want to be industry leaders in customer experience. While any company can improve portions of its customer experience, it takes more than some ambition and a few superficial changes to create lasting differentiation.

Companies that master all four competencies are customer-centric organizations which are defined as:

An organization that continuously aligns its resources with customer needs.

1.    Purposeful Leadership: Operate consistently with a clear set of values.

Just about every organization has vision and mission statements floating around their hallways. But when it comes to making decisions on a day-to-day basis, these documents are no where to be found. They play No Role in how the company is actually run.

Instead, companies make decisions based on individual goals and objectives, and handful of hard metrics, and by making compromises across conflicting departmental agendas. And that’s the best case. Most times decisions aren’t coordinated at all.

That’s why organization’s need to (re) introduce a clear purpose for their organization that is more compelling than just more profits; a raison d’être that aligns the myriad of day-today decisions.

Smart Development, inc. can help companies develop this competency by:

·         Crafting a compelling vision that engages employees and customers.

·         Ensuring that the vision is cast and cascaded throughout the organization.

·         Embedding the vision and values in the HR fabric of the company.

2. Employee Engagement: Align employees with the goals of the company.

It might seem obvious that customer experience requires a complete focus on customers. But that’s often not the correct approach. What should you focus on instead? Employees. While you can make some customers happy through brute marketing force, you can not sustain great customer experience unless your employees are brought-in to what you’re doing and are aligned with the effort.

It’s important to remember that unengaged employees don’t create engaged customers. But this is not about altruism. Employee engagement creates a success cycle.

Smart Development, inc. can help companies develop this competency by:

·         Building leadership capability at every level in the organization

·         Ensuring that you get a good return on your training investment

·         Developing highly engaged employees.

3. Compelling Brand Values: Deliver on your brand promises to customers.

True brands are more than just marketing slogans, they’re the fabric that aligns all employees with customers in the pursuit of a common cause. John Wang, CMO of Taiwanese electronics company HTC, captured this sentiment well:

“Brand value means something to the end user. Brand recognition, all it means is a bunch of advertising to make people recognize the brand name…Building brand value is like earning respect; you have to earn respect, you cannot command respect.

To earn respect, companies need to make sure they live up to their brand value every time they interact with customers.

Companies looking to master this competency should:

·         Reaffirm brand tenets

·         Define clear brand promises

·         Widely communicate brand values

·         Keep your brand promises

4. Customer Connectedness: Infuse customer insight across the organization.

In most companies, decisions are made with woefully little customer insight. People often rely on their “gut feel” or outdated anecdotes about customer needs, desires, and feedback. But any company that wants to improve its customer experience needs to embed deep customer insights in every aspect of its operations.

Companies looking to master this competency should:

·         Focus on target segments

·         Build voice of the customer listening systems

·         Make customer insight widely availabl

Smart Development, inc has provided management and customer service programs to customer-centric companies such as Trader Joe’s for the past nineteen years. These training programs have helped Trader Joe’s maintain its customer-centric ethos even as it expanded from 51 to 400 stores located in 30 states.

Discover the tools that will enable to build your organization into a customer-centric company by contacting us today at 323-854-1713. Evaluate your company's effectiveness in customer and employee engagement, leadership, and productivity by requesting one of our free assessments.

All the success!

Peter Mclees, Principal

P. S. Smart Development Inc. has an exceptional track record helping restaurants, stores and other businesses create a strong culture, leadership bench strength and the teamwork necessary for growth. Having worked with several companies throughout their growth cycle, we have valuable insights and strategies that would help any late stage startup, small or medium sized company achieve sustained growth and prosperity.

http://smartdevelopmentinc.com

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1. The “ladder of customer loyalty” talks about the different types of customers a company encounters. There are five steps in this ladder. Starting with: Suspect: A suspect is someone who comes across your companies’ promotion. They are a potential suspect for your company. Prospect: If the person is interested in your promotion they become a potential prospect. Customers: A customer is someone who purchases either your product or service. Clients: Clients are those who come back to you. Advocates Promotes your business on your behalf. They are so happy about your product/service that they tell others.

High Achieving Leaders Have A Balanced View

High achieving leaders are always scanning their environment. They step back to look at the big picture, and they dive into the details. They look at the past to learn from their experiences while planning for the future.

High-achieving leaders understand the value of seeing both the big picture and the details. Too many leaders work from a 10,000-foot perspective without having a detailed knowledge of their people or business. Although a high-level perspective is necessary for leadership success, it should be accompanied by an in-depth understanding of your employees and customers.

Before you can effectively adhere to your plans, you must understand the details and needs of your operation—your cost, profit and customer experience drivers. Leaders who make a habit of ignoring the little things find themselves ignoring the big things. Taking the time to really understand your business or your department from both perspectives help prevents blind spots for you and your team

Another way to balance your view is to look at both the past and the future. Every team has a variety of performance indicators. Leaders should understand the difference types of indicators, what they mean and, most importantly, how to balance them.

Consider a measurement continuum. The two ends of the continuum represent the two types of performance indicators. Lagging indicators are the results of your team’s past performance—they enable you to see if your plans worked as well as expected. Leading indicators are the drivers of your team’s future performance—they give you early warning signs of problems.

Many leaders only look at lagging indicators, typically financial ones. These lagging indicators are important to help you understand how you have performed in the past. However, they must be balanced with leading indicators such as employee and customer engagement that tell you how your team will perform in the future.

A singular focus on lagging indicators gives you little opportunity for corrective action if you drift off course. Effective leaders look a both the leading and lagging indicators.

This balanced view enables you to know what did happen and also indicate what will happen

As the captain of your ship, keep a balanced view of your team’s performance to increase your competence and adhere to your plans. Chart your course (High-level plan) and ensure the deck is clean (details). While on your journey, check the wake of your ship (lagging indicators) and keep an eye on the horizon ahead (leading indicators).

All the success!

Peter Mclees, Principal

P. S. Smart Development Inc. has an exceptional track record helping restaurants, stores and other businesses create a strong culture, leadership bench strength and the teamwork necessary for growth. Having worked with several companies throughout their growth cycle, we have valuable insights and strategies that would help any late stage startup, small or medium sized company achieve sustained growth and prosperity.

http://smartdevelopmentinc.com/

Has Teaching Become The New Sales?

Most people don’t want to be sold to. Correction – most people don’t want to feel like they’re being sold to. What they do want is to know is that they’re getting value for money. They want to know they’re purchasing the product that’s right for them. That they’re making the right decision.

  

And to help them make the right decision, they will research, study and explore. From product and comparison sites, blogs, forums and reviews, there’s certainly no shortage of information and opinion to turn to.

What helps customers more than anything though is trusted guidance. Honest, balanced insight, that can help take them from being undecided to committed.

With Beyond the Box's study showing that 75% of online shoppers believe ‘retail staff fail to communicate well’, it seems that in many cases either staff lack the depth of product knowledge that customers expect or, that if they do have that knowledge, they’re unable to share it effectively.

Teaching Sells

New super informed customers expect retail associates to come prepared with at least their own level of product knowledge – to add value. As important, is the ability for staff to communicate that knowledge clearly. Clarity trumps persuasion every time.

Add a little personal experience to the mix, some general market awareness and a clear idea of pricing and you’ve a healthy conversation underway - a conversation that will stand more than a good chance of concluding in a sale.

Teach staff to teach. Teach them to communicate effectively and customers will reward you with their business.

All the success!

Peter Mclees, Principal

P. S. Smart Development Inc. has an exceptional track record helping restaurants, stores and other businesses create a strong culture, leadership bench strength and the teamwork necessary for growth. Having worked with several companies throughout their growth cycle, we have valuable insights and strategies that would help any late stage startup, small or medium sized company achieve sustained growth and prosperity.

http://smartdevelopmentinc.com/