Since returning customers are crucial to a company’s success, losing a customer can be very costly. Fortunately, winning back lost customers is less expensive than finding new ones. Therefore, you should have a strategy to win back lost customers. This will require you to set aside your bias and be aware of any behaviours that might be driving them away.
The following guidelines can help develop a strategy to win back customers who have taken their business elsewhere.
The first step of developing a strategy to win back lost customers is determining whether they are lost in the first place. Unless you have a subscription model business, this process is much easier said than done.
You need to understand the average purchase cycle of your customers. For example, if you run a dental clinic, you might see most patients twice a year for cleanings and once a year for exams. If you run a café, you might see most of your regular customers at least twice a week. Therefore, you can usually classify your customers as lost when they are no longer making purchases during the average buying cycle.
Sometimes, you will know the exact reason a customer abandoned your business. As such, you will need to nuance your strategy to recapture that customer based on their reasons for leaving. However, you might not always know the reason for the departure.
We need to outline the most common reasons customers leave. These reasons differ somewhat between industries, but some of the most common are:
- The company didn’t meet expectations or broke promises.
- Employees exhibited disrespectful or unprofessional behaviours.
- The cost of the product or service exceeds its value.
- Competitors offered a better alternative.
- Bad publicity scared off many of your customers.
You can get better insights by speaking to customers who have left or looking at online reviews. This approach will keep you from succumbing to any bias that leads you to make the wrong assumptions.
Once you have identified why you are losing customers, you can develop a strategy to start winning them back. Possible approaches to retain their business are listed below:
- Publicly apologise for mistakes. Customers who leave your business due to bad publicity might return if you pledge to make amends and correct any behaviours that might have led to dissatisfaction.
- Offer discounts to old customers. Customers who felt your prices were too high might return if you offer reasonable deals.
- Offer new features or amenities. You might have lost customers to large competitors operating on economies of scale. Unfortunately, you might not be able to compete with those companies on price. However, you can offer more personable service or other features to win them back.
- Create a simple outreach strategy to old customers. Some customers might simply need to be reminded about your business. You can start an outreach campaign to reconnect with them.
You might want to experiment with different approaches to regain lost customers. For example, the process might involve following one or a combination of the tips above.
One of the most expensive problems for most businesses is lost customers.
Fortunately, you can often take a few steps to win them back if you outline a customer recovery strategy based on the above guidelines. If you are willing to put aside any bias you have and correct your behaviours, you should be able to regain lost customers.
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