Losing customers is always hard, but it doesn’t have to be the end of the story. While you may think you know why your customer left, it’s likely that you don’t actually know what’s wrong, and unless you really discover their reason for unhappiness may never be certain. Unfortunately, losing customers is all too easy if you don’t understand their needs or listen to their feedback.
As we wrote in our previous blog post 3 Things You Can Learn From Lost Customers, And What To Do, your first step with your former customers is to understand why they have left your business.
Winning a customer back can be tough, but it’s neither as tough nor as costly as acquiring new ones. Learning your shortcomings and how to improve them, in order to keep your customers, is worth the effort, especially since an unhappy customer can give you plenty of helpful information about your processes and how this can be improved. The effort to reach out and correct the problem may not win the customer back right away, but it can turn into a valuable source of referrals. That’s win either way!’
Did you know? Companies that prioritize the customer experience generate 60% higher profits than competitors. (source: Gartner Group and “Leading on the Edge of Chaos”)
In the same way that you show your current customers that you care about them by valuing their feedback, you can take proactive steps to win them back. Keep in mind, however, that you must first assess if you want to win them back, as not every customer is an ideal customer. In that case, at least make sure the customer leaves with a sense that they have been served justly.
Now, let’s get into the 3 steps to winning back unhappy customers:
1. Understand and Correct
Make sure you understand and analyze the issues why a customer has left your company. If you don’t ask, you’re not going to find out, and the best thing is that no one is going to be more honest with you than an unhappy customer. Is it a recurring issue, where a process in your business needs to change? If so, take steps to correct the process and restore your service levels to a high standard.
Likewise, sometimes the issues that cause the customer to leave are very specific and may only may affect that one customer. If you discover it is a result of something your company did wrong, take full responsibility. Empathize and relate to the customer from their perspective. Honestly admit mistakes, apologize, and ask how you can make the situation right. Making the customer feel understood makes everything else easier for you. Ideally, you’ll implement a solution that works for both your business and the customer.
Did you know? 67% of customer churn could be avoided if the business resolved the customer’s issue during their first interaction. (source: Kolsky)
While you’re fixing the problem, keep your former customer in the loop. In practice, this could mean that you inform them about the progress of the changes and improvements that you’re making, in addition to thanking them for their feedback. If you want to convince someone to give you a second chance, use language that not only persuades, but shows your real concern.
Any communications along these lines must make it clear that the customer’s opinions and complaints are sincerely appreciated, have been actioned, and how. And if the changes help you gain also new customers, be sure to thank the former customer for their valuable input. They may be so impressed with your service that they tell their friends and family how great you are, even if they themselves don’t come back to your product or service.
Did you know? 11% of customer churn could be avoided if the business simply reached out to the customer. (source: Kolsky)
3. Incentivize and Nurture
Once you’ve learned from your former customers why they stopped doing business with you, and done your best to fix the issue, it’s then appropriate to ask the former customer to revisit the decision. When you’ve show a genuine effort to improve, most people are willing to give your business another chance. Let them know how you’ve responded to their concerns, and ask that they consider purchasing from you again. As mentioned, you may even want to sweeten the deal by offering something extra, like a discount, for their trouble. You can also create an engaging campaign just for lost customers telling them you miss them and want to do something – whatever it takes – to get them back.
While it’s true that admitting that your business has made a mistake and asking for the customer’s business again can be intimidating, don’t let it stop you from taking these necessary steps. The likeliness of winning back an unhappy customer than acquiring a new one is much higher, when handled properly, and studies like Regaining ‘Lost’ Customers: The Predictive Power of First-Lifetime Behavior, the Reason for Defection, and the Nature of the Win-Back Offer, by V. Kumar et. al state that second-time customers show a noted increase in lifetime value than during their initial run with a service.
The point to your efforts isn’t just to win back the customer’s business – it’s to win back their trust and loyalty, and a genuinely kind gesture can soften even the unhappiest customer. Start out again by expressing your appreciation and never stop doing that, because the last thing you want to do is win back a customer who becomes unhappy a second time!