Marketing Maven Test:

Q: According to a survey by Marketing Metrics, what was the probability for a successful sale to the following groups?

   1. Prospects

   2. Active customers

   3. Lost Customers

A: Click here for the answer

5 Reasons Why You Lose Your Best Customers and Why They Don't Come Back

by Paul Schwartz

It has been shown that most companies lose between 10% - 40% of their customers each year.  The financial impact of having to adjust your business to lost customers can be significant.  Couple that with the impact to employee morale and the negative word of mouth from lost customers and your business is facing some critical success hurdles. 

In the next few issues of this newsletter I will look at ways of successfully turning the problem of lost customers into growth opportunities for your business.  Beyond the obvious area of poor product or service quality, I suggest you start by looking at the following 5 areas that typically limit your ability to identify and win back your best customers:

1. Not being able to identify high-value customers - some customers are OK to lose, but you need to know which ones are going.  You want to keep the high-value customers, but to do that you need to be able to identify them. (see the issue on segmentation for more info)

2. Not being able to see a single view of your customers - if you have multiple product lines you need to be able to see how much a single customer purchases from all those product lines.  This will give you an accurate picture of the true volume of business for each customer. Without this info your best customers can remain hidden from view.

3. Being too strict with terms and regulations for high-value customers - there should be some flexibility for your best customers, and what better what to demonstrate to those customers that you value their business by bending the rules a little.  If they have been consistently paying their invoices on-time and miss one payment perhaps you can let the late fee slide.

4. Lack of coordination between prospect names and lost customers - if you are sending new prospect offers to lost customers you are further damaging this already poor relationship.  If a customer is lost and you want to win them back you need to acknowledge the lost business, let them know you value their business, and put forth a special offer to win them back.

5. Inability to pursue to lost customers to win back their business - are your customer support reps empowered to win back lost customers, do they know it is a priority and have they had training in how to do it the right way?  If a high-value customer calls customer support your staff should be trained to identify why they are leaving, and to make appropriate offers that fit the unique customer needs.  Often times customers don't tell you they are leaving, when they do, see it as a gift and a way to grow that relationship.

Need help designing and implementing a program to win back lost customers?   Please contact us for an introductory discussion to see how CONGRUITY can help improve your customer retention and improve your business by winning back lost customers.  Visit us on the web at www.congruity.biz

Copyright © 2005  CONGRUITY.

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