6 Unconventional Ways to Win Back Customers and Reduce Customer Churn

Posted on by

Vendasta guest blogger post.

“Your service sucks! I am glad I am getting out of it now and will NEVER recommend it to anyone.”

Business owners are bound to hear this from a customer at some point in time.  We all make mistakes; nobody’s perfect.

But if you think that is the end of it and that the business will never be able to win back the customer, that, my dear friend, is foolishness and an opportunity missed.

According to a study done by Marketing Metrics, there is only a 5-20 percent chance of turning a prospect into a customer, but there is a 20-40 percent chance of winning back an ex-customer by stopping customer churn.

Now, you don’t have to be a math genius to understand which one is better. On top of this;

  • 70% of businesses agree that it is cheaper to retain customers than acquire new ones
  • A dissatisfied customer is likely to tell 9-15 people about their experience

Focusing on customer acquisition alone is not sustainable; in the long run, it is bound to create a negative impression about the brand.

Here are some simple and actionable steps businesses should take to win back customers and reduce customer churn.

  1. Personalized reminder emails – we miss you  

“If you’re running a real business, email is still the most effective way to universally reach people who have expressed interest in your product or site.” – Colin Nederkoorn (founder Customer.IO)

So, it does not make sense to leave this channel out of a“win-back campaign.” In fact, re-engaging lost customers over email is a lot easier, as they are already familiar with the brand.

Casual emails saying “we miss you” or “come back” with coupons and offers is one way to do it. But, if you want it to be more effective, segmentation is the way to go.

  1. Build a database of customers who have stopped purchasing the products, and/or who have switched to competitors.
  2. Ascertain the reason behind this by conducting exit surveys.
  3. Classify them into different segments based on their feedback.
  4. Create email templates addressing each one of those reasons.

Example: In the case of hair salons, the reasons to switch could be price, bad service, fewer options etc. These issues can be addressed with personalized emails that address the exact problem that they might have had.

  • Price: loyalty bonus, discounts or coupons
  • Bad service: new stylists or new equipment
  • Fewer options: introduce them to the newest offerings
  1. Say thank you for calling it out

A typical business hears from 4% of its dissatisfied customers.” — Ruby Newell-Legner in Understanding Customers

More than 68% of customers churn because they feel that the company does not care about them (Super Office). How can businesses solve this? Take their complaint seriously and make an honest attempt to solve it.

The first thing a business should do when a customer leaves or switches is find out the reason behind it. If it is due to an issue which can be addressed, they should do address the issue. ASAP. Following that, the business needs to let the customers know that they have fixed it and credit the customer for calling it out through their website, email or social media channels.

This is a great way for a business to illustrate that they take customer feedback seriously, and that the customer was right to point out the issue. It does not matter if the customer has already left; businesses should never leave a complaint unaddressed. According to a study by White House Office of Consumer Affairs, negative word-of-mouth caused by bad customer service reaches more than twice as many ears as positive word-of-mouth.

Through this process, there is also the added benefit of optimizing a business’s customer service process.

  1. Stay visible

Once a customer switches, it could be difficult to win back their service. This is when data comes to rescue—the data the business has maintained about the customer.

It’s good business practice to send customers birthday wishes on their birthday, send greetings for festivals and big events, analyze their purchase history and send them product recommendations, tell them about new offers, send them nostalgia-evoking emails (email evoking memories of their first purchase. Brands like Asos, Levis and Littlewoods regularly offer discount on such anniversaries). These actions will, hopefully, ensure that the business will not be forgotten.

  1. Make the exit as easy and as comfortable as possible

It is really hard to stop customer churn; it will happen one way or other. The reasons could be avoidable in some instances, and unavoidable in others. Whatever the case is, businesses should always make the exit as easy and hassle-free as possible.

If that involves refund or return of the product, don’t be hesitant, and process it as fast as you can. Businesses should let the customer know that they will always care for their time and effort, even if the customers are leaving.

Cold shoulders will spoil the chances of customers coming back in future. A bad break-up could also lead to bad mouthing, which will have a negative impact on the brand image and referrals. And we all know that customer referrals are like marketing gold dust. No sales and marketing strategy can deliver such warm leads at low or no cost.

  1. Don’t be reluctant to recommend another product (even a competitor’s’)

“When we do not sell the item a potential customer is looking for, we freely recommend a competitor of ours that is better suited to meet the customer’s needs, this always impresses the customer.” – Tom Kemper, Playing Cards and More (Customer Sure)

There might be instances where a business’s product or service will not fully satisfy the customer’s requirements. In such cases, they can leave a good impression by recommending a product/service which is a better fit for the customer. This might sound odd, but it is a great way to show that they truly care about your customer. By counselling them clearly, the business is making the customer’s job a lot easier. If the customer ever needs the product or service of the business, you can be sure they will remember this goodwill.

Creating a guide of tools is another way to go about this. Businesses can list out pros and cons of each tool in an unbiased way, also including pricing and other major details that are useful for the customer.

A strong positive undertone makes a business’s brand much more open and welcoming.

  1. Share the roadmap

Businesses can let customers know what the future holds—new features, expansion plans, additions etc. If the customer is impressed by the new features, menu, plans, etc, she may come back to you.

Even if customers don’t return, considering them as partners makes them feel valued and important. It will surely lead to more referrals and positive word-of-mouth. For example, at my startup Hiver, we always try to fdetermine the reason why a customer left us. Say it is due to the absence of a particular feature; we make a note of it, and send that customer an email once it’s on the charts. We would also give the customer(s) a discount. This practice has helped us improve our re-capture rate by 2X.

Know when to let go

Not every customer is worth winning back. Once you find out why they left, determine if you want to take additional steps to win them back, or if they are a good fit for the business. If the business thinks they are not worth it (because of payment defaults, difficult to deal with etc.), or if their product/service is not suitable for them, it is always better to let go.

Niraj Ranjan Rout

Niraj is the founder of Hiver (hiverhq.com), an app that turns Gmail into a powerful customer support and collaboration tool. Niraj works on programming, customer support and sales, and also contributes to design and UI. He’s a fusion music aficionado and loves to play the guitar when he can.