Businesses have come to terms with the fact that not all leads will become customers. Most marketers celebrate when they convert 15 percent of their prospects. But what’s hard to accept for most of them is losing valuable customers who have been nurtured through the sales cycle.
Losing a customer is one of the biggest expenses for any business, and 70 percent of them agree—the average value of a lost customer stands at over $240. On the other hand, Marketing Metrics found that you have a 20 percent to 40 percent chance of winning a customer back.
Although some businesses are trying to get back their lost customers, most of them are not doing it right. Retargeting has been the go-to tactic despite proving time and again that it’s not always effective, at least not as a standalone strategy.
In the rush to save their $240, most businesses are overlooking these very effective strategies for reclaiming lost customers:
Find out why they left and take responsibility
The first thing to do after a customer has left or taken longer than usual to make a purchase is to find out why that happened. No matter what they give as the reason for leaving, you’ll be in a better position to woo them back knowing what it is than giving them a cookie and following them around.
If they cite price, for example, you can determine whether they are just cheap or there is indeed a disconnect between your pricing and the perceived value of the item you are selling.
Daniel Richmond, managing director at online watch retailer Tic Watches, says the most common reason why customers leave is poor customer service. RightNow found that 82 percent of customers left a company because of a bad customer-service experience. Defecting customers have cited experiences such as indifference on the part of the salespeople, bad attitude, delay in having their issues sorted and incompetent staff as their reasons for not returning for repeat business.
According to the Research Institute of America, the average business won’t hear a thing from 96 percent of its unhappy customers. Hence, you must take an active role in finding out why your customers leave. You can use tools such as surveys, Twitter, Facebook and email.
Use conjoint analysis to adjust your offer
While price doesn’t often come up in studies as a major contributor to customer defection, what they pay has to align with what you offer. If it doesn’t, customers can usually tell. Through research, you might uncover information that can help you adjust your offer to create a win-win situation.
When making buying decisions, every customer has to deal with trade-offs. For instance, would they rather go for the highest-quality product or service or the cheapest? Do they care more about good service or design? Or which features would they do without for a lower price?
A good case study is the cryptocurrency industry. Universa’s token sale option was completed at the height of the Bitcoin boom, and it analyzed the market and discovered why a typical cryptocurrency customer leaves. The company wooed its customers back by making its blockchain technology 1,000 times faster and its transactions 100 times cheaper than Bitcoin’s.
“With our superior blockchain speed and low transaction charges, it was really wise for cryptocurrency buyers to come back to us, because we were able to offer our users really smart contracts and smart money,” says Alexander Borodich, CEO of Universa.
Conjoint analysis can help you uncover these trade-offs and adjust your offer accordingly.
Offer worthwhile incentives
“The difference between a customer ignoring your retention campaign and jumping back onboard could be a discount you’re willing to offer,” says Luca Torzulli of CouponBuffer.