The Big Secret About Winning Back Former Customers
The bad news: customers leave all the time. Whether they find a lower price, had a bad experience with a customer service rep, or simply don’t need the product anymore, people drift away from companies every day. The difference between successful companies and middling ones is how the successful companies design their offboarding processes to win back their former customers.
The Biggest Opportunity No One Pursues
Businesses fail to recognize just how big of an opportunity they’re missing by neglecting their offboarding processes. In our new report, The State of Customer Cancellations 2020, we asked customers if the brands they left could have done more to retain them. In our surveyed group, 61.6% said yes. Imagine how much more successful a company could be by retaining just 10% of the people who wished the business had done more at the time of separation.
People don’t want to cancel in most cases. Even easy cancellations cause at least a little stress. It’s far easier to let things stay as they are than to take conscious action to change the status quo. Customers must reach an actionable level of motivation before they reach the point at which they want to cancel, and many of them would love an excuse to stay the course.
Our research found that most customers (57.5%) wanted businesses to offer discounts or other price-related incentives to stay. That’s not surprising. Our research also found that price was the most common reason to cancel, so it makes sense that people leaving for reasons of pricing would be interested in price-related reasons to stay. Companies that can offer discounts should do so, but only in the right situations.
Other factors matter to customers too, though. We found that many customers wanted lower prices less than they wanted their issues resolved. For some, that means an apology or concession for a difficult interaction with a representative. For others, that may mean an improved product or a replacement. One bad experience can motivate customers to cut ties, but if one bad turn can sour a relationship, one above-and-beyond good interaction can salvage the same.
Customers Are Willing to Come Back
During our study, we found that 42.5% of customers would consider reconnecting as a customer of a company they left, while 24.4% of customers were unsure. That’s more than half of departing customers either interested in reconnection or open to the possibility. Companies that ignore this market do so at their own peril.
Again, we found that discounts would bring back old customers better than anything else, but money doesn’t always matter most. Some people wanted companies to fix issues with products. Others wanted better customer service. Many times, companies have channels to provide for those needs, but customers don’t find what they’re looking for before they resort to cancellation.
Because of these opportunities, companies cannot afford to practice poor offboarding habits. Sadly, many still rely on hostage-holding or surrender, two habits that push customers away for good. Instead of clenching too tightly or giving up too easily, businesses should take a more enlightened approach to offboarding and win-back tactics.
How to Win Back More Customers
First, do the research at the moment of separation to find out why customers want to leave. Are the prices too high? Did something go wrong? Did the customer move, or did the person’s situation change to make continued contact with the company difficult?
Get the information you need by conducting offboarding surveys and logging the data. As you gather information, look for trends. If people tend to leave after a certain time period, find out why. It’s normal to see significant drop-off at the end of a pricing promotion, but if the drop-off seems excessive or if other factors are at play, dig into that data to find the answer.
Once you know why people leave, create personalized content to bring them back. Send customers who leave for pricing reasons a special return discount. Tell people who left for product-related reasons about a new product or improvement that might change their minds. For people who left for more challenging reasons — e.g., a frequent shopper who moved to an area without a location — get permission at offboarding to stay in touch, either with all marketing emails or just with store expansion updates.
By communicating with consideration for the reasons people leave, you can make an immediate improvement in your ability to win back lost customers. As you refine your win-back strategy, you will learn more about the needs of your audience. Use that information to build a better company and take your customer retention rates to industry-leading levels.
Haven't seen the full report? Download The State of Customer Cancellations 2020