A new study of over 500 executives in several fields, conducted by CustomerSat and customer win-back expert Jill Griffin, has found that lost customers are ripe for winning back, but few companies are actually taking advantage of this opportunity.
A significant 62% of buyers surveyed who recently dismissed a key supplier reported choosing another supplier that offered basically the same product or service, according to Griffin.
This finding indicates that the lost account's needs have not changed and can still be filled by the dismissed supplier. Importantly, buyers also report that their dismissed suppliers do not even attempt to win them back.
Only 25% reported the dismissed supplier offered an apology and only 14% of buyers said dismissed suppliers adopted a 'keep in touch' strategy with them. These two actions, making an apology and staying in touch, are essential steps to recovering lost business. Yet, the data clearly shows that once an account is lost, most fired firms do not pursue the win-back opportunity.
Reasons for customer loss
Of course, the reasons for customer loss must always be factored into the win-back strategy. The research found that non-competitive pricing was quoted as the key factor contributing to customer loss for 44% of buyers and 46% of sellers. Losing a customer on price often signals that the dismissed supplier's value proposition has grown stale and needs a boost. To win back the customer without caving in on price, value issues must be carefully addressed.
Steps to win-back
Griffin recommends examining the key steps involved in the formulation of a customer win-back strategy:
- Forgive yourself and your team mates. Getting past the pain of losing an account is the first step.
- Apologise to the lost customer. If you lost on price, a statement that suggests you're sorry you failed to deliver on value will help set the stage for a win-back.
- Ask what you can do to win back the lost customer's business. Listen carefully to all their grievances, and act on them.
- Fully address the customer's requirements, and investigate what the customer will pay a premium for. Communicate the changes you have made, and ask again for the customer's business.
- Be patient with the customer, and be open and honest. Remember that some wounds simply heal slowly.
- Stay in touch with the lost customer, and make it as easy as possible for customers to come back to you. Avoid the temptation to say "I told you so" under any circumstance.
- Finally, when the lost customer does return, earn the business thoroughly and justify their trust at every opportunity.
According to Griffin, "When you are dismissed, it's very important to walk away gracefully. Burnt bridges are hard to re-build. Good sportsmanship statements like 'I completely understand your decision' and 'We should have performed better' will help take your customer off the hook, and also help to position you for re-acquisition."