There's a difference between lost customers and dead customers. Most sales managers and salespeople don't make that distinction, but Jill Griffin does in her book Customer Winback: How to Recapture Lost Customers -- and Keep Them Loyal.
In the rush to get new business, we ignore lost business. Marketing Metrics, a Paramus, New Jersey-based consulting firm, estimates that the closing ratio for new prospects is 5 percent to 20 percent. The potential for winning back lost customers is 20 percent to 40 percent. Here are five ideas for creating your own customer win-back program:
1. Sales Management Must Drive the Win-Back Program
It's unacceptable to give the lost causes and hopeless cases to the new salesperson. Sales managers have to identify the lost list and get out of the office and visit them with their sales reps. During those meetings, sales management's job is to listen, take notes and summarize the lost customers' comments to demonstrate they are understood.
2. Establish the Measurement System for Tracking Losses and Win Backs
Sales management needs a system for identifying lost and recovered business. If you're not measuring lost customers month to month, you're not managing churn. Identifying which customers who did business with you last month are not doing business with you now is vital for beginning your win-back program. Request a free copy of a Churn Calculation Worksheet.
3. Create a Strategy for Revisiting the Lost
Your win-back strategy might include a meeting with top management, a letter from the CEO and a new needs analysis meeting. This all flows from the first face-to-face meeting where you discover the problem and refine your approach.
4. Celebrate Your Win Backs
Make sure the salesperson who wins a customer back gets recognition for that sale. What gets rewarded gets done.
5. Document Your Successes
Winning back customers is a process, and it should be a repeatable one. It may take seven steps instead of the previous four, but once you've won back several customers, you'll begin to see patterns. The last thing you should do is document the steps that work and make them part of your training program going forward.
As you can probably tell, prevention is easier than the cure. Manage customer expectations at the beginning of the relationship, not the end. Ask, "What result are you looking for in the next quarter (or appropriate time period) that will make you continue to do business with us?" Knowing the expectations at the beginning makes your life as a salesperson much easier and increases your chances of renewing a client.
It's not easy to win back lost customers. There may be some confrontation, and you will undoubtedly hear things you don't want to hear. However, it's hard to correct a problem you're not willing to discuss. According to George Walther in his book Upside Down Marketing, the easiest sources of new business are customers who got frustrated, aggravated or annoyed and can be seduced away by the competition.
So why are you sitting there reading this? Go talk to a lost customer.