Customer Retention: Bringing back customers that stray
Getting customers through the door for the first time is one of the hardest things for any business. Once they are in, assuming that they like what you have to offer, you can start to build a relationship that’s more likely to bring them back. But after customer acquisition and customer retention, what if you lose a customer? How do you go about getting them back?
Studies by Bain & Company, along with Earl Sasser of the Harvard Business School, have shown that even a 5% increase in customer retention can lead to an increase in profits of between 25% and 95%. That’s a fairly significant statistic.
At the same time, we all know that customers can be fickle things. Even when you’ve gained their trust and enticed them into your shop or onto your site, they can be easily swayed by brighter lights down the road, or have their heads turned by a prettier home page.
The problem is that once you’ve lost a customer it can be a challenge to win them back.
All is not lost though. Assuming that you haven’t lost the customer through a catastrophic failure of customer services (and even that’s not necessarily the end of the relationship), there is plenty you can do to bring them back to where they rightfully belong.
Here are five top tips:
1. Smile, though your heart is breaking
Did you or one of your friends ever lose a girlfriend or boyfriend when you were young? What was the best way to get them back? Sending them endless lovelorn poems and composing forlorn mix-tapes or playlists with really meaningful titles? Or treating them as a friend, letting them know that you were hurt but talking to them like normal, catching their eye once in a while and maybe sneaking in the occasional shy smile? Keep the lines of communication open and offer re-activation deals, but don’t bombard them with generic messages.
2. Offer a different perspective
Your profits can get gnawed away fairly quickly if you compete on price because there’s always someone that’s able to undercut you. Far better to compete on the quality of your products or services. It can also be worth subtly reminding them why they came to you in the first place with some well-placed observations about something that matters to them. It can make you stand out and help encourage them back.
3. Understand their buying patterns
It’s something we’ve discussed in a number of blog posts, but understanding buying patterns is another key part of regaining lost business. If a customer purchased a pair of walking boots from you last month, they are unlikely to want another pair in the short term, but if winter’s drawing in they might want some thicker socks. The level of detail that the current generation of sales systems can offer should give you a good chance of understanding where the cross sell opportunities are.
4. Play an active community role
With many products or services, playing an active role in a community can be a great way of bringing people back. Sponsoring a local team or specialist event can encourage people to look again and think positively about what you do.
5. Reward loyalty
Offering rewards is also a great way of enticing customers that have strayed to come back into the fold. This doesn’t need to be done in an overt fashion; it can simply be part of an ongoing dialogue. The current generation of reward platforms are increasingly flexible, making it easy to identify the customers you would like to entice back. If you know that individuals on your database are price sensitive and don’t really put a lot of profitable business your way, don’t waste too much effort on them but if they are part of the 5% that potentially generates an additional 50% of the profit, then it’s certainly worth putting some thought into what is likely to bring them back through your door.
Loyalty and reward systems are not the blunt instruments that they were five years ago. They can help you attract and retain customers and respond quickly to challengers that are enticing your customers away. The data that they deliver can help you spot issues before they become problems, they can be set up pretty quickly and are suitable for firms of all sizes.