What is your customer win-loss ratio? It is not the same as sales conversion rate. Each year you add new customers and each year you lose some customers. Number of new customers added in a year divided by number of customers lost is the win-loss ratio for your business. Lost customers can undo all the benefits of great marketing and sales strategies. How do you retain customers? What do you do to win back lost customers?
Losing customers can derail your sales goals. Your rate of adding new customers has to be higher than the rate of losing old customers. If you lose more than you add, your sales will decline. Not a good situation for any business.
Do you monitor these numbers for your business?
- What is your customer churn rate? How many customers do you lose each year?
- Increase or decrease in sales for old customers. Repeat sales is important. You want your existing customers to buy more and more often
Losing customers puts more pressure on your sales team to keep adding new customers. You need to plug the hole. What is your business strategy to win back lost customers?
The math is pretty simple – keep winning more than you lose. How do you accomplish this?
Why do customers leave?
Customers leave when they are disengaged, underserviced or overpriced.
Businesses have to work hard to keep the door closed for the competition.
- Deliver on the promises made
- Listen to the customers – explicit and implicit expectations
- Meet customer expectations, better than the competition
Disengagement has to be the top reason why businesses lose customers. All other issues can be resolved if you keep your customers engaged.
Engaged customers use appropriate channels to communicate with your team and raise concerns. They share their dissatisfaction about price, quality, late deliveries or better offer from competitors.
Disengaged customers quietly walk away.
How can you win back lost customers?
All improvement start from measuring the existing performance. Start with measuring customer retention. How many customers drop out each year? Ask for feedback, from the customer and from departments who served the customer. Work on the top reasons.
You won’t get anywhere unless there is a clear measurable and goal. Check past data and insights. How many customers did you lose last year and the year before? Set goals to improve on past performance. If customer churn was 25 per cent for last year, you may set a goal to reduce it to 20 per cent.
Communicate the goals to everyone in the team. Let the team know why is it important to reduce customer churn. It helps increase year on year sales, increases customer life time value and reduces the pressure on adding new customers to meet the sales goals. Also, it is not easy to win back lost customers.
Identify the root causes for customer churn
Why did you lose customers in the past? Is there a gap in commitments made during sales and actual delivery?
It is a good practice to review lost customers once a month. Ask respective team members to share their findings. Did someone speak to the customer? Always talk to customers once they leave you. Thank them for being a customer. Ask for honest feedback.
Discuss the findings and customer feedback in these monthly meetings. These give you actionable to reduce customer churn.
Predict customer churn
Act before it is too late. Regular reviews and voice of customer will help you identify patterns of customer drop out. Build a prediction pattern or scorecard to check the relationship health for your customers.
Use this FREE template to monitor client engagement and risk.
Set a process to re-engage lost customers
Never miss out on seeking feedback from lost customers. It serves two purposes. One, you get to know the root cause for losing a customer. You can go back and fix the problem for other customers. Second, it gives you an opportunity to win back lost customers.
The process to reengage lost customers should list down actions to be taken with timelines – who does what by when?
- When to call the customer for feedback?
- The agenda of the call
- Questions to be asked during the call
- An exit email to be sent with all necessary information. The email should have a link for a customer satisfaction survey
- Frequency of communication to win back the customer (email, calls, meetings)
- Win back offer (discounts, free trials etc.)
These customers know your business and team. It is easier to re-sell to these customers compared to newer prospects. Before you attempt to resell, demonstrate that you have understood the problem and have fixed the problem.
A lost customer who decides to come back can be the best advocate for your business. These can be your life long customers and can help with word of mouth publicity and referrals.
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