Customer churn is the reality of every business, whether B2B or B2C. Despite being available during the entire buying journey, there is no guarantee that the customer will stick with your brand forever.
Do you feel the need to regain your lost customers? Read on as we will explain different strategies to win back lost customers to your business.
Even though losing customers is unpleasant for a company, it’s only realistic to accept that customers will leave the brand at one point.
There can be various reasons for a customer’s departure, including better prices elsewhere, alternate choice of products, unresolved complaints, or poor customer experience. Therefore, a brand should identify possible reasons and create strategies to win back lost customers.
Customer acquisition contributes to the overall brand value and profitability of a brand. For example, a study by Marketing Metrics stated that companies have up to a 40% chance of winning back an old customer, compared to a 5-20% chance of acquiring a new customer.
The goal should be to identify prospects worth converting and lost customers worth reacquisition. With a combination of these two factors, you can increase the customer lifetime and boost ROI.
To move ahead in this direction, you must focus on why customers are churning in your business. So, in this article, we will be discussing the different strategies to win back lost customers
Why Do Customers Churn?
Several studies have proved that retaining existing customers is five times cheaper than acquiring new ones. Considering the research, brands must focus on winning back lost customers to ensure recurring business growth.
You must be aware of their needs and demands to entice customers to associate with your brand for the
long term. It takes just one experience or moment for a customer to decide that they no longer want to stick to your business.
That instance may be an unpleasant experience, an issue with the product, better deals from competitors, or personal preferences. Each company should have a list of possible questions and scenarios around customer churn to determine why they are losing patrons.
There can be several factors behind customer cancellations.
- Your product or service was not up to the mark.
- Your customer plans to reduce costs.
- The customer does not need the solution anymore.
- There was a gap in understanding your product’s value to the customer.
- The customer changed vital personnel.
- There are cheaper or more popular alternatives available in the market.
Many of these reasons are subjective, but proper communication and engagement can help overcome these challenges. In addition, each cancellation should be treated as an opportunity to learn more about customer requirements and improve service standards.
One of the strategies to win back lost customers is to offer the leaving customers a small survey to find the reason behind their decision.
Even if they skip the survey, the focus of a company should be to obtain answers to the following questions-
- Why did the customer choose the business in the first place?
- What do customers consider the USP of the brand?
- Is the pricing model appropriate for the market?
- Are customers not getting value out of the products or services?
- Did customers find a cheaper and better alternative?
- Did customers face any unpleasant situations with customer support?
- Is your company having repeated downtimes or delayed assistance?
- Is the reason something personal that can be addressed?
- How can the company win back the business?
Depending on your industry and business scale, you can expand the list of questions and pitch them to customers. Use survey platforms like Google Forms or integrated website forms to create simple surveys.
Analyzing survey responses can help in root cause analysis (RCA), after which you can focus efforts on finding and fixing the problem. In the absence of adequate survey responses, adopt deep thinking and behavioral analysis to gain insight into churning customers.
Gathering and analyzing data from different sources offer insights into customer patterns. These insights can be further used to address customer pain points.
For instance, if you see several customers leaving after finding bugs in the application, your developers need to fix the issues once and for all, or your customer support representatives need to offer quick help and support to fix the errors.
Your job is to find the optimal solution and apply it evenly to improve the user experience, automatically reducing churn.
Is Investing in Customer Win-Back Really Worthy?
This has been a significant point of debate in companies, whether you should invest in winning back old customers or attracting new customers. But, to look at it logically, lost customers have already once been won over by your brand.
They have shown interest in your products or services in the past. They are also familiar with your processes and service standards. But, most importantly, you already have some insights about their pattern.
Admittedly, not all customers are worth pursuing a win-back. But some of them might be easier to reacquire than engaging new prospects. The sweet spot is to identify these customers and recycle your traditional engagement strategies to bring them back.
A study found that 26% of customers return to a company due to a win-back campaign, after which their lifetime value doubles. Also, the ROI for reactivating an old customer is 32 times more than a new one. There are several reasons for this.
You can use old customers’ brand awareness to rouse their interest again. You also have their content recorded. Modern customer engagement platforms, databases, and CRMs have historical data on lost customers. You can use this data to restart interactions and apply customized strategies to acquire them again.
However, determine first the cost and returns of re-engaging a customer. Options like service upgrades, discount offers, and membership benefits each have their success rates and ROIs. Then, choose the strategy that fits your business the best.
This is where unified data can help you figure out what is likely to work for a particular customer. You can increase your customer base at lower costs and higher ROIs.
Winning Back Strategies for Maximum Impact
Your customer win-back strategies should be smart, tailored, and cost-effective to get the highest success rate and ROI. Here are some approaches you should take to bring lost customers back to your brand.
Target worthy customers
Theoretically, all customers are equally important. But when you plan strategies to win back lost customers, it is essential to identify which prospects are worth pursuing. For example, some customers deserve more time and effort as their business is more valuable.
For instance, you should engage customers with a high monthly recurring revenue and good lifetime value. Then, check records to find out which customers stuck longer with your business and how much they spent during that lifetime.
Also, check the reason for leaving. For example, if customers have a lot of complaints about your products or service, chances are they won’t be interested in returning.
Extend personalized offers
Your communication and approach toward a lost customer should always be personalized. Research says that 80% of customers prefer doing business with a company that offers customized support. So, your communication to win back lost customers should include personalized emails, messages, and tailored offers.
A personal touch makes your customers feel valued and helps them to connect with your brand. And don’t worry about resource deployment in this strategy. Modern CRM software and chatbots can generate personalized messages by retrieving data from the database and using those insights to create proactive content.
Incorporate customer feedback
To address a customer left in the first place, your best bet is to collect feedback and work on their problem areas. This will help you understand which aspects were liked and disliked by the customer. This can be done through survey forms, review columns, or chatbots to collect feedback.
If you have negative feedback from your strategies to win back lost customers, you should work on a different strategy that addresses their pain points and provides better solutions. This will create a good impression and boost retention rates.
Plan a reward or incentive strategy
Your win-back strategy will boost positively if you associate it with rewards or incentives. Customers are always willing to pay a little extra for better service. Use this to your advantage by offering lucrative deals, discounts, advanced features, early access to sales, and freebies.
These efforts will make a customer feel better about their returning decision. It will also boost their loyalty and satisfaction levels. Ensure that the promotional offers you give have a value attached and are relevant to the customer’s needs.
Retain customers before they churn
The easiest way to bring back lost customers is to not let them leave. Data insights can help massively in this area. When data patterns and customer behaviors indicate their loss of interest or intent to leave, contact them proactively with re-engagement campaigns.
Identify customers with long stagnant periods, like people who haven’t logged into their account or made a purchase for a specific period. Reach out with soft reminders about your products and services, and invite them to revisit your company offerings.
This strategy has higher success rates than pursuing a customer who has already deactivated their account or switched to an alternative.
Customer engagement metrics must be tracked and analyzed to formulate better marketing strategies. Data insights and reports help you understand which areas to target for re-engagement campaigns. Then, use this data to plan how to invest time and money in specific lost customers.
Check whether lost customers have unresolved issues or complaints regarding products and pricing. It is essential to address these concerns before deciding to switch service providers.
Customer retention strategies are easy to plan and employ once you get the hang of how to approach your customers. With modern insights-driven dashboards and AI technology at your disposal, you can identify behavior patterns in lost customers, identify worthy candidates to pursue, and convert them with innovative approaches and personalized campaigns.
Then, it is only a matter of rehashing traditional customer engagement strategies to win back lost customers and customizing them based on data insights.