Harvard Business Review found on average that businesses can lose up to half their customers every five years. Some lose 15 to 40 percent per year.
Companies lose customers for a variety of reasons, some of which may include:
- the customer experienced real or perceived real problems that stem from something technical or employee-related
- the customer hired a new decision-maker and he or she has other sources
- you changed their sales representative or key contact and it didn’t work out
- the customer reduced their need for your offerings
- the customer changed their operations or the way they do business which reduced their need for you or eliminated you as a source
- they experienced complacency or felt taken for granted somehow
- your pricing became less affordable to them
- they moved too far away to profitably sell to them.
What is your rate of customer loss? Do you want to win them back? Which ones?
Not only do you lose that revenue, you may also lose some goodwill and future customers if they left for poor quality of service reasons and they share their experience with others.
If you do, you must first decide which ones you want to win back. Not all are profitable, and although some may promise profit, it might take too much to win them back.
Not all former customers are worth having back. Some were too hard to please, too difficult to work with or were too much of a credit risk. Some are no longer feasible to work with. Some have outgrown the need for your product or service. Some are pure price shoppers who enjoy the bargaining experience and will always shop around.
If it appears you have no chance to win them back … for conditional or structural reasons … at least be sure they were happy with your product or service, so they may be inclined to refer others to you.
As you conduct the research and interviews with them, find out specifically why they left in the first place, and why they haven’t come back. Is there anything you can remedy? Do you offer something you didn’t before, and that’s why they left? Even if they won’t or can’t come back, you’ll have information you can use to retain current customers.
With some customers, you’ll find the primary decision-maker who approved the purchases has left the company.
Some may reveal a bad experience that went untold so you couldn’t remedy it at the time. If it was truly terrible, at least in their eyes, apologize and ask for their forgiveness. Don’t just say you’re sorry.
Take the time to grade the customers as A: very important, large or profitable. B: mid-sized, perhaps offering above average in profitability or ‘nice to have.’ C: smaller offering so-so or average profitability.
Start your win-back campaign with the C-rated former customers, so you can learn how to best engage in the dynamics of the process. Better to stumble around a bit with the less important ones than the more important ones.
Sales managers need to get out and visit with the former customers, if they will have them, and listen and take notes on the causes. This might even include a meeting with the CEO or other senior managers of the customer.
Be sure and document things as you go, as this will help future efforts by revealing repeatable steps and actions you can take.
Be sure and celebrate the win-backs and recognize those who helped.