Consultant tells how to win back business that has strayed
By CHERYL HALL / The Dallas Morning News
AUSTIN – Jill Griffin believes a customer lost should be an opportunity found.
By her estimation, most businesses lose 20 percent to 40 percent of their customers each year. Yet they don't seem to give these defections a second thought, focusing marketing dollars instead on attracting replacements.
"The human psyche often doesn't want to go where there's trouble," says the 46-year-old marketing consultant who's spent her career studying consumer loyalty. "It's much easier to reach out for new customers than it is to open a sore spot and deal with a problem."
But the rewards can be great for those who do, she says.
"A business is two times more likely to successfully sell to a lost customer than to a brand new prospect," Ms. Griffin says. "And oftentimes, the customer will re-engage at a higher level and with more momentum."
But before you can win back customers, you have to know why they left, she says. And too many companies have no system for tracking their dearly departed.
That's worrisome because some lost souls are definitely more valuable than others, she says.
"The last thing you want to do is win back people you pushed away because they never paid you in the first place. How much sense does that make?" Yet, she says, it happens frequently.
And forget about the shopper who's been bought away with discounts or coupons. "They're the butterfly customer. The potential for them to be loyal to anything besides the lowest price is practically nil."
The best prospects are those who were lured away by a better value from the competition, left in a huff due to bungled service or slipped away through lack of attention.
Ms. Griffin cites a national survey in which nearly 70 percent of the respondents said they stopped being customers for no particular reason – indicating that there's a whole lot of benign neglect going on.
Brand loyal?
Her observations come from 22 years in branding and marketing, including three spent researching and writing Customer Winback: How to Recapture Lost Customers and Keep Them Loyal. This book, which follows her 1995 business bestseller on customer loyalty, was co-written with New Jersey-based customer retention expert Michael W. Lowenstein and published earlier this year by Jossey-Bass.
Her company, The Griffin Group, might be better defined as Jill Inc. – the "group" being a virtual team of experts that she brings in as needed for projects. Her books, speeches, training and consulting work generate about a half-million dollars in annual revenue from such clients as Advanced Micro Devices Inc., the U.S. Navy, Cisco Systems Inc. and Wells Fargo.
One recent client is Omnicare Inc., which provides institutional pharmaceutical services to nursing homes and assisted-living facilities. The last two-plus years have been particularly challenging for the company, which is based in Covington, Ky., after dramatic changes in Medicare reimbursements panicked many of its client facilities into making buying decisions based solely on price.
Now that the market has stabilized somewhat, Omnicare wants to regain lost ground. Ms. Griffin told its annual conference of pharmacy managers and senior management to first pursue customers who'd said adios.
"She startled the audience completely by saying those were the easiest prospects," says Cheryl Hodges, senior vice president. "That goes against the grain of thinking it's easier to start with a clean slate than to deal with all that baggage."
Ms. Griffin pointed out that nursing home administrators have very high turnover, so chances are good that the decision-makers are different people now.
"You could see that light bulb going off," Ms. Hodges says.
Joe Kane, president and CEO of Days Inn Worldwide Inc., hired Ms. Griffin for a series of six summits held across the country for the franchisees of its 1,955 hotels. He said they embraced her message that branding is a powerful tool if all parties live up to the service goals.
"Ninety-five percent of the feedback rated her as excellent, which is very high scoring," Mr. Kane says.
'All about relationships'
Ms. Griffin's study of business relationships started with her childhood, which was spent in rural Marshville, N.C., where Steven Spielberg filmed The Color Purple.
"Even in a small town like ours, we had two pharmacies, two hardware stores and two grocery stores. As a kid, I was very aware that one of these stores did better than its counterpart," she says in a soft Carolinian accent. "It was all about relationships. The stores took on the personality of the proprietors."
She took that fascination to the University of South Carolina, where she earned her undergraduate degree and MBA in marketing.
In 1979, Ms. Griffin joined RJR/Nabisco, and five years later, at age 29, she became senior brand manager for Winston, the company's largest name, overseeing a $90 million advertising budget.
She moved to Austin in 1985 to help launch a nationwide expansion for AmeriSuites Hotels as director of marketing and sales.
"I'd really gotten a megadose of the large corporate marketing game and wanted to do something totally different," she says. "I came from an environment where I had staff out the kazoo to a start-up where it's me, a desk and a lot of empty hotel rooms."
Then the Texas economy soured and venture capital dried up, putting the hotel company's expansion plans on hold.
"I'd burned the candle at both ends for eight years, and I was spiraling down," she says. "I thought I could have more control over how I managed my career if I went out on my own."
She published her first book, Customer Loyalty: How to Earn It, How to Keep It, in 1995, but not before the process extracted several ounces of her flesh.
She hired a ghostwriter and spent a painful year of tedious file-sharing and interviews. Just as they got to the actual writing stage, the writer died from a massive heart attack. Six months passed before Ms. Griffin could bear to open the stacked boxes and start again from scratch – this time depending on her own words.
"The timing was right, and I was the architect of the whole book, which made a big difference," says Ms. Griffin, who's working on its second edition, due out in fall 2002.
Time element
Back in her RJR days, Ms. Griffin talked about creating awareness, trial, purchase, repurchase and conversion – lingo that's jargon to people outside the branding world.
Now she uses words such as suspect, prospect, first-time buyer, repeat buyer, client and advocate to describe the stages of building customer loyalty.
Relationships, you see, don't happen overnight – nor do they tend to end that way.
Yes, some customers leave in a fit of pique.
But more often, a series of events has caused the business relationship to drift. She likens it to the slow leak of a tire.
"You need to spot customers on the fringe of being lost. Monitor your complaints. Look for evidence that the loyalty or buying is weakening," she says, then points to the clues.
"Their purchase orders slow down. You've had a close client relationship, but now they're not inviting you to the meetings that they once did. Their time horizon is shorter – they used to sign one-year contracts; now they're signing six-month ones."
When you make overtures, make them specific and sincere – not poorly disguised form letters that are more likely to offend than attract, she says. Know the customer's past preferences and tell how you can currently meet their needs.
"You should be keeping that information anyway," she says. "The age of anonymous service is over. Your only real weapon is to learn more about your customer faster than your competition."
Early on in her business, when every dollar counted, Ms. Griffin learned that a client was dissatisfied with a portion of an all-day seminar she'd given. Without being asked, she returned 25 percent of her fee.
"I never heard a word from him, but I did notice in my next bank statement that the check had cleared," she recalls. Two years later, Ms. Griffin landed a major speaking assignment, thanks in large part to a glowing recommendation from this guy.
"It taught me to always make good with clients," she says as if she's reabsorbing the lesson. "That's the essence of win back: Get right with the customer."