Client churn is inevitable in account management, but it doesn't have to be the end of the relationship. In fact, you can use churn as an opportunity to learn from your mistakes, improve your service, and win back lost accounts. In this article, you'll discover how to handle client churn and win back lost accounts in six steps.
The first step is to understand why your client decided to leave. Was it due to price, quality, communication, expectations, or competition? Did they give you any feedback or warning signs before they left? You can use various methods to gather this information, such as exit surveys, interviews, or data analysis. The goal is to identify the root causes of churn and the gaps in your service.
Adding some introspection to this step: was it due to apathy? Did you take steps to build the relationship beyond the transactional; enabling the client to get to know you better. If the answer's no, consider building some touchpoints in to your client development systems. To paraphrase Lee Iacocca - Business is a bunch of human relationships.
Reach out to lost clients with a personalized and empathetic approach. Express your genuine concern for their departure and inquire about their reasons for leaving. Listen actively and take note of their feedback. Demonstrate a willingness to address their concerns.
An informal conversation will get you the information you need to analyze the churn. It could be as simple as "Why are you leaving us?" to get a client to open up.
Ensure to evaluate critically the customer success plan that was put in place and what are the gaps that led to the churn, apologise, accept and have conversations with your customer champions to allow you to put an action plan to evaluate efforts of your teams in improving the key KPIs/Pain points of the customer that resulted in churn in the first place
The next step is to reach out to your lost client and express your regret for losing them. Don't be defensive or blame them for their decision. Instead, acknowledge their reasons, apologize for any inconvenience, and thank them for their business. This will show them that you respect them and value their feedback. You can also ask them if they are open to staying in touch for future opportunities.
Reducing churn starts with a whole-company culture that values and recognizes the customer has 51% of the vote, always. With the right mindset, commitment to value and being a resource, delivering on promises and frequent collaboration in the customer’s changing needs, churn slows down. Winning back - be humble when you win them back, make amends, treat them in a manner that shows you appreciate the relationship - that is what a customer is, a relationship. Human and interactive and messy sometimes - accept that and act accordingly.
I feel that it’s important to learn from good and bad. When a client leaves it’s typically because of a problem. Get to the root cause of the issue and show them how you’ve taken not only corrective action but preventative action as well. Measure your results and develop a method of keeping score (KPI, scorecard etc). Anything you track should include customer complaints, cost of quality and revenue. Don’t just accept issues, track them down and work to resolve them. Record your results and find ways to not just show but prove you’re doing what you say. If you do these things you’re less likely to lose a client. If you do lose a client still fix the issue and other clients will benefit. You’ll have data to help get the client back.
The third step is to offer your lost client a solution or incentive that addresses their pain points and shows them the benefits of working with you again. For example, you can offer them a discount, a free trial, a customized package, or a new feature. You can also highlight your strengths, such as your expertise, your results, or your testimonials. The key is to make your offer relevant, valuable, and compelling.
In the past when I’ve had a customer take their business elsewhere, if they were large enough to support this, I would offer an end-of-year rebate on their sales. So they would receive a check for the amount of whatever the percentage of their sales were for the year. This usually went out by the end of the month in January. I’ve found great success is this incentive.
The fourth step is to follow up with your lost client and nurture the relationship until they are ready to come back. Don't be pushy or spammy, but don't give up either. You can use various channels, such as email, phone, social media, or referrals, to stay in touch and provide useful content, updates, or reminders. You can also use triggers, such as contract renewals, product launches, or industry changes, to create urgency and interest.
This step is important to help communicate to the customer that you respect their decision and that you listened and learned from what you discovered in step one. Make sure they know that they will be welcomed as a returning customer when the opportunity arises vs. fearing that there would be backlash for them straying.
The fifth step is to close the deal and onboard your lost client as if they were a new one. Don't assume that they remember everything about your service or that they trust you completely. Instead, restate the value proposition, the expectations, and the deliverables. You can also use a contract, a proposal, or a welcome kit to formalize the agreement and set the tone for the relationship. The goal is to make your lost client feel confident and excited about working with you again.
When onboarding any new or returning client make sure you take the time to build a charter or gain agreement on "Customer Success Criteria". This takes a significant amount of active listening to fully understand the customers' expectations which will also help speed up the healing process from any lingering thoughts or feelings a returning customer may have. Set a cadence where you can revisit, review and update the criteria with the client. This will help you keep a finger on the pulse of the customer, learn any new expectations and help minimize the potential of unexpected churn.
The final step is to retain and delight your lost client by providing exceptional service and exceeding their expectations. Don't repeat the same mistakes that led to churn in the first place. Instead, monitor their satisfaction, solicit their feedback, and act on it. You can also surprise them with extra value, such as referrals, rewards, or recognition. The goal is to make your lost client loyal and happy, and turn them into advocates for your business.
Oftentimes the customers that you gain back after temporarily losing them to a competitor can become your most loyal customers. They are back with you for a reason but don’t be content with that. You have to earn the win and earn the keep. Tap into their reason why they’re back and focus on making that reason more valuable than any other that would make them churn again.
I have worked with others who got old customers back, as described here. But because of their focus on the customer, they would forget to work on the problem that made the customer left in the first place, and it wouldn’t be corrected by the time they returned with their business. THEN the sales rep would start working on fixing the problem. I would strongly suggest taking the time - while a customer has left - to observe the department that was part of the customers issue, and come up with a solution to fix the problem, then act on fixing it. Oftentimes I would find the hole or kink in the process that was messing things up, was a minor fix and made the day-to-day work easier on those involved.
These are great examples of what to do when client churn is identified, but so often I find the underlying problem is a failure to recognize that’s it’s happening in the first place. When only a handful of clients carry the business, it’s easy to give consideration and attention to each customer. When the business relies on a large customer base, this becomes more complicated. Often times, customers leave because they aren’t loyal to a business that only sees them as a statistic on the profit and loss statement. Using tools like a CRM can help, but if the communication is sterile it will only exacerbate the issue at hand. Finding a way to make each customer feel special and rewarding loyalty is the key. Thank You is better than an apology.