Winning Back Six Figure Clients

An Interview with Scott MacGregor

In this article you'll learn how Scott MacGregor won back 25% - 30% of the past clients at a high-growth tech firm.  The average value of these clients was in the hundreds of thousands of dollars a year, and they were 5X cheaper to acquire than new clients, so the ROI and sales Scott generated were exceptional.

Dan Pfister: Scott, before we get to your reactivation strategy could you tell us a little about yourself and your company?

Scott MacGregor: Sure, my company is called “SomethingNew” and we have three different core services. Overall, we consider ourselves Talent Strategists. The first service is a very unconventional and effective talent acquisition/recruiting service. The second is an advisory service called “SomethingNew Labs” that helps companies build the foundations for talent acquisition, onboarding and retention. And the third is an advisory service for individuals called “Career Ideas” which is a very high touch, one-on-one career strategy advisory service. The details behind all of these unique services are the reason we have won a record 5 consecutive American Business Awards for Innovation.

Dan: Would you share the story of one of your client reactivation successes?

Scott: We’ve been very fortunate, we haven't lost a client here yet, but in my former life, I was Vice President of Sales and Marketing for a very high growth tech firm and we had attrition that was probably 15% to 20% a year.

Whatever the issues were, we would try to solve them. And then, even though we lost the client, we would send our solutions to them.

To stem the tide we implemented very in depth post mortems with every department head, and we’d really try to get at the essence of the issue with the client, if they were open to it. Then we would re-engineer for solutions. So whatever the issues were, we would try to solve them. And then, even though we lost the client, we would send our solutions to them.

I think one of the reasons why we were we able to reactivate so many clients was we admitted our mistakes. We didn't necessarily ask them for the business back, but we did say, we recognize this as something that we could improve on. And then we showed them the roadmap that we were going to use for future clients.

I think rather than getting defensive, that kind of killing them with kindness, admitting our mistakes and having a path to the solution really made a lot of people eventually come back to us.

I can't think of a situation where somebody said, “Oh my God, what a mistake we've got to come back right away.” But over time, we were able to reactivate quite a few.

We were very dominant in the legal space with literally the largest law firms in the world. So when we lost them, those were pretty bitter pills to swallow. But we were able to get a number of them back using that methodology.

Dan:  How detailed was this solution roadmap?

Scott: It was pretty detailed because we wanted to let them know that we recognized the issue and that we were going to try to solve it. Obviously, it was too late to solve it for them, the horse was already out of the barn, but we wanted to recognize it as an issue and to solve it for future clients.

Oftentimes you celebrate your wins, but with your losses, you don't want to really think about them or talk about them. But I think that's where all the growth comes from.

Oftentimes you celebrate your wins, but with your losses, you don't want to really think about them or talk about them. But I think that's where all the growth comes from.

We were hyper-focused on our losses and that ultimately is probably one of the reasons we were so successful in growing the company double digits for 17 straight years.

Dan:  That's a fantastic mindset. What did you include in the solution roadmap for your lost clients?

Scott: The roadmap basically said, this is what you told us that we did poorly, it’s the reason why you left us and went with somebody else and this is how we're solving the problem in the future.

I’ve done this for many, many clients and some didn't come back, but they would say, “Wow, no one's ever done this before.”

Dan:  So what percentage of past clients did you end up winning back?

I would say our win back was probably in the 25 to 30% range.

Scott: I had a fantastic Director of Sales Operations that kept all the stats and I don't remember the actual percentage, but I would say our win back was probably in the 25 to 30% range, over time.

Dan:  And what would you say the average time would be?

Scott: About a year because typically they were going to the end of our contract and then signing a one year contract with somebody else. There were times where there weren't contracts and we would win back clients relatively quickly, within months, but most of the time it was a year.

Dan: What was the sales person’s role in the process?

Scott: They would be involved in regular follow up just to check in, but in terms of the post mortem that was done with the department head. The re-engineering for solutions was also done by the department head and the documentation was done by my sales ops team.

Dan:  So when that former client came back, would the original salesperson get the account or did the account go to someone else?

Scott: We called them National Account Managers and for the most part they would keep the same person because that person would continue to follow up. But we may have had an occasion or two where it just wasn't the right fit or there wasn't the right dynamic and we would swap out the National Account Managers.

Dan: How would you know if there wasn't a good fit between your National Account Manager and the client? 

Scott: Well if the client felt that their expectations weren't met or if they felt like they were over promised and under delivered, then the National Account Manager who had signed the account originally would transition, but that was very rare, it might have happened two or three times.

Dan:  Was the cost of acquiring a new client relatively high?

Scott: Yes, the cost was very high.

Dan:  What was the relative cost of re-acquiring a past client?

Scott: It was much lower. We had a fraction of the touch points.

You've already gone through so many hurdles to get the account, you've had to spend so much time and effort and money just to get their attention.

But you've already leaped those hurdles so I would say it’s significantly less expensive to reactivate than it is to get net new.

I would say 5x is probably conservative because there's so much effort that goes into just getting them to notice you and getting a seat at the table. All of those costs and all that energy and time are eliminated with reactivation.

Dan:  Why do you think that most companies don’t try to reactivate their past clients?

They mistakenly think that “the client left us and we’ll never get them back” and it’s just not true

Scott: I think people just give up. I believe they mistakenly think that “the client left us and we’ll never get them back” and it’s just not true.

Dan:  What do you think were the most important ingredients for reactivating your past clients?

Scott: Humility and action. I think being humble enough to say we screwed up and then actually taking action to fix a problem that they no longer needed us to fix - that showed how seriously we took things.

But they would have an inkling of that already because we did regular surveys of our clients and I would actually call when any survey came back with a satisfactory or below in any category. I would immediately call them and an extremely high percentage of the time they were shocked that they got a response because people fill out surveys all the time and they never hear anything back.

But the message was, “Satisfactory is not satisfactory to us, we want to figure out how to do better than satisfactory.” I think just hearing that from the head of sales let them know that we're a little bit different anyway.

Dan:  Did these clients represent significant revenue?

Scott: Most of the contracts were over $100,000 a year and could go over a million but most were in the hundreds of thousands.

Dan:  So winning back these past clients had a huge impact on the bottom line.

Scott: Absolutely!

Dan:   Do you know of a strategy that generates more revenue for the amount of time, money and effort invested than reactivating past clients?

I don't think there's anything as cost-effective as reactivation.

Scott: I don't think there's anything as cost-effective as reactivation.

At SomethingNew which I started 5 ? years ago we specialize in sales and marketing and particularly in sales and marketing leadership and I can tell you that CROs and CMOs are focused on net new business and they're focused on keeping what they have. But I rarely hear companies that are really focused on reactivation.

I just think nobody talks about it. It's a very fresh perspective.

I think people just believe that when a client leaves it's done and over with. But look at the ROI, look at how much easier it is, and less expensive it is to reactivate versus going after net new logos.

I think people concentrate on retention, but when that client’s gone, I think very few companies actually have a plan of what to do.