In the down economy of these past years, you probably have customers who have left you. Many had no choice. It was about the economy — not about you.
They are ready to return IF you just ask them.
But before reaching out, get prepared. And that starts by defining the term “win back.” The Direct Marketing Association tells us, “A win back is a dormant customer who begins to purchase again due to a targeted sales and marketing effort.”
Here’s seven factors to consider:
1. Avoid This Trap. Many firms lack a win-back component and treat lapsed customers as new prospects. That’s a huge mistake! The very fact you have a history with this lost customer is a huge advantage to wooing them back. Use it!
2. Turn “Lost” Into “Love” . It’s easy to forget that lost customers are, first and foremost, people with feelings. Many may feel shy about the fact they haven’t sent you an order in a long while or been in to shop. Leveraging these very circumstances can positively differentiate your firm in the minds of lost customers. It’s your opportunity to show you really care…to reach out and let customers know they’ve been missed…..to demonstrate they matter to you.
3. Do Your Homework. Not all lost customers are created equal. Some lapsed accounts are worthy of higher win-back investment than others. Segmenting your lost accounts by such factors as “long-term revenue potential” and “shortest time to revenue” is critical. Before you reach out to lost customers and invite them to return, it’s important that you have a clear understanding on which lost accounts are your best win-back prospects and the payback potential for winning them back.
4.Pay Attention to Last Price Paid. Studies show that at the point of reactivation, customers respond negatively to price if that price is higher than the last price paid before lapse. But relax. After the relationship has been reestablished price increases can occur without affecting customer defection.
5. Use Social Media as a Win-back Tool. Research shows the role of social media has a direct effect on switching intentions. A service provider with strong social media presence will likely have an advantage over the provider who does not. Bottom line, go where your customers are online to strengthen your win back efforts.
6. Test. Test. Test. What win-back offers best entice which lost customers? Is a lapsed customer that received special favors and gifts in the past, best motivated by a price advantage coupled with special treatment? Testing various offers is key. It enables you to understand which factors influence which customers to return.
7. Reinforce the Decision After the Sale. Research shows that the lost customer’s decision to reinitiate a relationship after a long lapse results in a greater amount of dissonance relative to the decision to reinitiate a relationship after a shorter lapse. The way a lost customer who comes back handles this dissonance is to engage in post-decision processing that reinforces the new decision that has been made. Do this: Provide your newly reacquired customer with ample messaging that communicates why the decision to return was a sound one.
The down economy has heightened customer defection in most firms. Don’t squander the opportunity to recapture lost customers you simply can’t afford to lose. Winning back lost customers is your ticket to increased sales, profits and heighted emotional attachment with your reinstated customers.
The time is now. Don’t delay. Win them back before your competitors grab them!