The art of retrieving lost customers

First published on WalesBusiness.org

You can easily get used to regular, repeat business from a client. Then …no order, no explanation, nothing. It’s a horrid feeling. But think positive. You can win the business back. First, let’s look at some of the reasons for losing the business:

One much-quoted survey suggests customers stop doing business because:

• 1% die;
• 3% relocate (this can be the individual or the organisation);
• 5% favour someone else;
• 9% prefer what they perceive as a better price, quality or specification elsewhere;
• 14% become dissatisfied with the quality of what is offered;
• 68% move away because of what they see as an indifferent attitude towards them.

Only 4% of customers who change suppliers ever say they are doing so, much less explain why. The other 96% just quietly disappear – unless you do something.

These are sobering statistics. But what do they tell us? That the reason for change may be the key to winning the customers back. For example, if a contact dies or moves away, who replaces them? You may need to make a few phone calls, but it should not be difficult to find out. Of course, a newcomer to an organisation may have their own contacts and prove as difficult to crack as any other new prospect.

But you could end up with two customers: the original contact is their new organisation. On the other hand, for the old contact who has moved to a new location, to deal with you might seem more difficult – because of increased distance between you, for example.

So, suggest ways to overcome this, such as offering to make a regular visit to their new site. Or a consultant might not charge for the increased travel costs (less expensive than finding a new customer).

It’s a lot easier to win back customer right away than weeks or months down the track when the customer has settled into a new business relationship. So ask why they moved.

If the client feels there were problems, real or otherwise, you need the facts. Once you know what these are, specific failures may be simple to sort out. So try to identify the true situation. Telephone, write, send out questionnaires – do whatever it takes.

Be thick-skinned about this. I heard of one case where a customer admitted to the account manager that he got right up his nose. The latter persuaded him to continue doing business with the firm by switching the account to another partner!

Reassurance about the benefits of ‘better the devil you know’ may be all it takes to win the customer back. Other inducements might include a specific offer, a price adjustment, different delivery or service arrangements or a change of specification.

But be careful not to make any revised offer smack of desperation. Instead, make it sound like a positive new development or change of policy: ‘So many of our customers ask for this, we are making it standard practice.’

It is not surprising then that the 68% of people change suppliers because of a perceived indifference towards them. This does not usually imply massive service failures. (These are far more likely to result in prompt complaints, which you can deal with and move on from. Never regard it as too late to take this line if this is what has happened). Often the problem is one or several minor things that can be easily corrected if recognised.

After all, if someone has done business with you regularly for some time, it is unlikely that everything is suddenly wrong. However, it often happens that small issues start to accumulate, especially if, because the client is ‘easy’, you have delegated them to an inexperienced junior. They may not recognise the warning signals of a relationship unravelling, as you would.

Alternatively, it may be a general feeling of neglect or being taken for granted, which eventually induces the thought, ‘Service might be better elsewhere.’

Two actions are necessary to nip disaster in the bud. First, ask yourself: ‘Have I taken my eye off the ball,’ ‘Am I in danger of letting regular customers feel they are being taken for granted?’ ‘Should I increase the frequency of contact or make some of it more special?’ If regular orders are usually placed by a junior make them feel more involved by asking them if they have problems with your service or how it could be improved.

Second, consider what might remind a customer, even a lost one, of your ability to look after them better than your competitors. It may be the action you take to address a specific problem, such as their feeling that contact has become lax.

You could say something like, ‘We haven’t spoken much of late, my fault I know, but I have some new ideas that I think could help you. Do you have time for lunch sometime soon? And perhaps we can agree a more regular form of contact?’

This can be done with or without reference to the lack of recent business. For a long-lost customer, you might send out a couple of individually designed mail-shots before re-establishing personal contact.

Never give up on lost customers too soon. Keep in touch. Be persistent. Judge the frequency of ‘rescue’ contact carefully to prevent annoyance – your best guide here is what you would consider irritating.

And remember that, even if it takes six carefully-judged contacts over a year to retrieve a customer, it will probably cost you less, and take less time, than to recruit a new prospect. Every customer you win back makes the effort worthwhile.