Statistics show a firm has a higher probability of winning back a lost customer than prospecting a new one. Author Jill Griffin shares annual defection rates by industry. Jill shares how most firms don't focus on customer loss. Author tells real-world story of the grave "mishandling" of a high value credit card customer and her ultimate defection.
- It's a fact, you have a higher probability of winning back a lost customer than converting a prospect into a first-time buyer. Take a look at these statistics. The probability of selling to an active customer is of course the highest. But selling again to a lost customer is anywhere from 20 to 40%, with first sales prospects at only five to 20%. So any preconceived notions of lost customers being a lost cause, think again.
Consider your lost customers as buried treasure waiting to be discovered. They are a hidden asset that can make your business soar. This very moment, that lost customer has a problem with their current vendor, and now's your time to pounce. Let me tell you a story that showcases why win back matters. A friend of mine was a highly successful businesswoman running a consulting firm out of Austin, Texas.
She had a large staff and three credit cards from the same company that she would use for business and personal transactions. She was a high value customer that any credit card company would wanna keep. Every year, she would spend a month in Hawaii at Christmas and charge her entire holiday on these cards, spending upwards of $20,000. One night at dinner with some very important clients, her card was denied.
Confused, she used a competing card to close out and called her credit card company afterward. She was informed by customer service that her account was overdue and she hadn't paid a $200 charge. She corrected them that this charge was under dispute, but the agent wouldn't budge. Not only were they not cooperative in helping her resolve her problem, they didn't apologize for the misunderstanding or even attempt to keep her.
She canceled her card. And to add insult to injury, upon returning home, she received a solicitation from the same credit card company on the phone, oblivious that they had recently lost her as a customer. Winning her back only required an apology, but the agent, still oblivious, did nothing. The lesson learned, equip your front line with the knowledge of who your top customers are, and then use that information to keep them.
According to recent research, the industries losing the highest amount of customers are TV and Internet providers, wireless providers, and banks. No matter which industry your business falls into, keep your head in the game. Know the research and stay on top of recent trends. Use information about lost customers to improve their experience and get them back. Bottom line, reestablishing a lost customer's original buying behavior is far easier than you think.
Win back matters because your customers who leave you are taking dollars out of your pockets and putting them into your competitors'.
Jill shows that customers defect for one of five reasons: (1) intentionally pushed away, (2) unintentionally pushed away, (3) pulled away, (4) bought away, or (5) moved away. She also outlines which of these customers are the easiest to win back—and how to say "sorry" in a way that will resonate.
- Why winning back customers is crucial
- How customers say goodbye
- The five types of lost customers
- Running a lost customer campaign