What do you do when a customer cancels your services? Do you go with grace and delete their name from your files completely, leaving no trace of their former relationship with you? Or, you can set a new strategy into motion to win them back! You can refocus and sell them other products/services you offer. At the very least, you can keep them on a “cold contact” list to revisit periodically just in case something changes. Often, canceled customers get overlooked, but can yield results over time with very little effort. Let’s explore some strategies to get the most out of your canceling customers and possibly win them back!
The definition of customer retention
Customer Retention is more than just holding on to customers, it’s keeping your customers engaged, empowering them to make their own choices, and encouraging them to become your brand’s advocates.
The numbers behind customer retention
You don’t have to be a financial wizard to estimate that if your customer churn sits at 10%, you can only breakeven by acquiring 10% of your current customer base, with new customers. This bleak outlook only gets worse if you look at the cost to acquire new customers versus hold on to existing ones. To drill down on what retaining customers translates into for your business, check out the following statistics:
- Research from Bain and Co has soundly demonstrated that, in virtually every industry, even a 5% increase in customer retention can increase a company’s profitability by 75%.
- Studies also show that acquiring a new customer can cost five times more than retaining an existing customer.
- Another report shows that the chance of a sale from a new customer is only 5-20%, while the sale probability from an existing customer range from 60-70%.
5 Ways to Win Back Former Customers
- Why it matters – Losing customers is an inevitability for all businesses, but it is a costly one, if it happens too frequently. Sometimes, it has nothing to do with you – a customer moves away, downsizes their home, or finds some sort of financial difficulty. On the other hand, when a customer goes with a competitor, they may not be satisfied with your services or has a distasteful experience. This can be harmful to your business reputation. Not to mention, gaining new customers is much more costly than holding onto the ones you have. Understanding the value of holding on to your current customers should be a mindset that permeates throughout your business.
- Try (hard) not to let customers go – A business should have a plan in place to hold on to customers. This strategy should encompass a robust communication plan that keeps customers in the know of the quality services you are provide; with continuous mechanism to check in with them and make sure they’re satisfied with your work. You may also explore loyalty rewards and other types of initiatives to show your customers how important they are to you.
- Train your customer service or sales team – Make sure your team knows what to do if a customer calls to cancel their services with your business. Do they have an offer in their back pocket that they can throw out to hold on to the unhappy customer? Should they contact the customer’s service technician or a manager to try to resolve things? By exploring these scenarios during training, your customer-facing team might save the day and save the customer.
- Gain intel on the why – While sometime customer hostility is unavoidable, the opportunity to learn why can be the key to keeping it as low as possible. Many businesses fail to follow up with canceling customers to learn why. This type of feedback could lend insights to a shift in the marketplace, a new competitor on the scene, or an issue with your services that is causing customers to be dissatisfied.
- Create an automated win back campaign – Once you’ve done everything you can to hold on to your customers and logged the reason they’ve canceled, one last step is essential. Don’t forget about them. Flag former customers in your database and send them communications (preferably automated so little effort is required) to try to guide them back to your business over time.
There are countless reasons to hold on to your current customers as best you can. One being, that you know more about them than you would about a prospect. You know what they were interested in, you know how to reach them, and you have some information about their spending capabilities – all things you can put into play to target your message. Spring-Green has a reputation for satisfying and retaining their customer base from year to year. With our on-going business support team, all Franchise Owners have what they need to keep track of all their customer’s needs. These assets make it far easier to retain customers and, if needed, convince customers to come back.