Winning Back Wandering Customers

by Mark S. Fulton

The days between Thanksgiving and Christmas are crucial for businesses that count on shoppers to shell out for Santa. In many cases, the holiday buying binge determines whether a business’ bottom line is recorded in red or black ink.

However, in the midst of this festive frenzy, there lurks a frightening specter: the Ghost of Customers Lost. This ominous spirit wanders through malls, shopping centers, business parks and office buildings collecting the spirits of dearly departed (from your business) patrons. It escorts them to the worst of all possible places—your competitor’s doorstep.

While the Ghost of Customers Lost is active all year long, it is especially busy at this time of year. The same bustle that brings a smile to the business owner’s face can also be the source of sour customer relations. Overtaxed employees can reach their stress threshold more quickly, paving the way for problems. A surly sales associate, a curt customer service
representative or a disagreeable delivery person is all it takes to propel a customer into the arms of You Know Who.

What do you do when that happens? In addition to strategies for keeping customers happy, you need a plan for bringing them back from the netherworld of lapsed accounts. At a time when every transaction matters, winning back former customers is an endeavor that can put a little extra jingle in your cash drawer.

I bet I know what you’re thinking: Isn’t it more cost effective to go after new customers than to try to resurrect departed ones? Actually, no. Research suggests that you are more likely to be successful at winning back former customers than drawing new ones to your business.

According to a study conducted by the research firm Marketing Metrics of Paramus, New Jersey, the average business has at best a 20 percent probability of making a successful sale to new prospects. The same firm has a 20 to 40 percent probability of successfully selling to “lost” customers.

Jill Griffin, author of Customer Winback: How to Recapture Lost Customers and Keep Them Loyal, details four steps for winning back wandering customers:

Step #1 - Find out why the customer left. Review account history and look for signs of trouble, such as a billing dispute or a complaint letter. Talk to others in your company who might have served the customer. Most important, talk to the customer himself and ask:

• Why did you stop buying from us?

• Did you tell us about your problems before you stopped purchasing from us? If so, what response did you get?

• Is there any way we can fix the problem? And if we fixed the problem, would you consider trying us again?

Once you have discerned the customer’s reason for leaving, assign the customer to one of four defection categories:

• Customers who were intentionally pushed away - You bagged your relationship because the customer proved too difficult to please or too much of a credit risk. This is one that can stay “lost.”

• Customers who were unintentionally pushed away - They were offended or angered because you failed to deliver goods or services as promised.

• Customers who were pulled away - Your competitor offered greater value, friendlier service or a better product.

• Customers who moved away - They either physically relocated or
outgrew the need for your products or services.

Step #2 - Research lost customers’ present needs by conducting a lost account survey. The customer who walked away from you six months ago may not have the same needs now as she did then. Learn what you can about the customer’s current needs and then appeal to those needs in order to bring her back.

Step #3 - Develop a winback initiative, which takes a proactive approach to bringing an inactive customer back to life. There are three steps for winning back your customer:

• Say you’re sorry - The simplest way to soothe an upset customer is one that is often overlooked. Saying “I’m sorry” immediately begins the process of mending the relationship. Even if you were right and the customer was wrong, your chief concern should be doing what is necessary to restore the relationship.

• Fix the problem - Listen to the customer’s assessment of the problem and make sure you understand. Sometimes the solution to the problem is simple. Sometimes the mistake cannot be easily undone and a compromise solution must be reached. The important thing is take immediate and sufficient steps to remedy the situation to the customer’s satisfaction.

• Give the customer a care token - This is another easily overlooked gesture that can make a world of difference. A care token is a specific action that you take as a way to let your customer know that the mistake was unacceptable and that you intend to do better to earn his or her business.

Step #4 - Measure, evaluate and refine your winback initiative. Monitor the number of incentive coupons, special offer responses and e-mail responses that you receive. Use the results to improve your winback techniques.

When the Ghost of Customers Lost comes rapping your door, tell it to go haunt someone else. By making an extra effort to satisfy current customers and win back past customers, your financial future will be a lot merrier.

Copyright 2001 © Mark S. Fulton