You offered discounts, expedited service, and a weekend at your summer home, but your customer dropped you anyway.
Once you finish eating a pint of Ben & Jerry’s in the bathtub, you have two options: move on forever or keep the door open for a potential return.
Even after customers leave, you can still win back their business in the future – and you should make every effort to do so. According to research consolidated by Small Biz Trends, a two percent increase in customer retention can lower costs by up to 10 percent. Further, your odds of selling to an existing customer are over 60 percent, while your odds of selling to a stranger are below 20 percent.
Customers who leave for a while still count as customers. They know your brand and your products, and despite their choice to stop paying for those products, they saw value in your services at one point. You can win them back, but to do so, you need a win-back strategy that provides consistent returns for your business.
What is (or isn’t) a win-back strategy?
Offering 10 percent off to all former customers three months after separation does not qualify as a win-back strategy. People leave for different reasons, and while a better price may appeal to some, focusing solely on price will not help you create the boost in customer lifetime value your company needs.
Ineffective win-back strategies share a few common traits. Most companies that struggle to win back customers don’t understand why those customers cancel in the first place. If you don’t collect data at the time of cancellation, all you can do is guess. Maybe they didn’t like paying so much money, but maybe they also wanted more variety in product choices or more helpful customer service.
Unless you ask, you’ll never know.
Imagine a gym-goer who cancels her membership because she moved to a new area. Would a 25 percent off coupon inspire her to commute across town just to use her old treadmill? Probably not. A newsletter announcing new locations, however, might inspire her to find a new gym home nearer to her house.
Audience segmentation plays a role as well. Some customers will never return to your business, no matter how much you beg. Targeting those customers will only harm your brand as they tell people how annoying you are. When a relationship breaks beyond repair, don’t press the issue. Your customer won’t win his ex back by liking all her Instagram posts, and you won’t win your customer back by spamming unwanted communications.
Your business must also show consistent improvement to implement a successful win-back strategy. Customers who cancel often do so because someone else offers something better. By improving the quality and availability of your products, services, and customer experiences, you can greatly boost your odds of success in win-back attempts.
Designing a better win-back strategy for your business
Win-back strategies that consistently bring back old customers depend on timely, relevant communications. You should make your first attempt to reestablish a connection within 30 days of the separation, before your customers forget why they were paying you in the first place. Communications should get specific about why customers left to open the door for future business once you solve the issue.
To create those communications, segment your audience by departure reason. The better your segmentation, the more relevant your messages will be and the greater the odds customers will listen to you will grow. Continue to refine your segments to speak mostly to customers who are likely to return, not customers who have moved or otherwise no longer fit your business.
Identify potential win-back opportunities by using an exit survey or similar information-gathering technique at the time of departure. Relevant communication within the first month after separation will greatly up your odds of reconciliation. Discounts and promotions work well within this window, but only for customers who are more concerned about price than variety, service, or another issue.
Even if you can’t address the concerns of a departed customer immediately, keep the line of communication open to share news about new product features, customer service improvements, pricing changes, new locations, and other relevant factors.
Treat your customers like friends by keeping them in the loop. Regardless of whether you rekindle the spark with the one that got away, people who view your business favourably may tell their friends about your improvements, paving the way for a host of promising new relationships.