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Connecting with past clients in new ways
This document discusses strategies for recovering lost customers. It begins with an overview of customer analysis, including calculating the costs of acquiring new customers versus retaining existing ones. Various approaches for recovering lost customers are then examined, such as personal appeals through phone calls, gifts, or visits, mass appeals through mailings and offers, or a mix. Specific tactics are provided like thanking customers for past business and offering discounts. The document also covers surveying lost customers to understand why they left and the likelihood of returning. The overall goal is to gain more customers than are lost by identifying valuable former clients and winning back their business.
Connecting with past clients in new ways
- 1. Wyoming Business Association Glendale Chamber "Connecting with Past Clients in New Ways" June 8, 2011 Drew McLandrich Scott Jacobs, Principal CEO McLandrich Consulting Harvest Consulting © 2011 Harvest Consulting LLC
- 2. Objectives for today Enjoylunch Discover how to recover lost customers Practical and tactical ideas for recovering lost customers Have some fun © 2011 Harvest Consulting LLC
- 3. Customer Analysis What doesit cost you to get a new customer? What does it cost to keep a customer? © 2011 Harvest Consulting LLC
- 4. Customer Analysis Gain morethan you lose! Identify # of lost customers. How long have they been lost? What do we know about them? What’s their value? © 2011 Harvest Consulting LLC
- 5. Customer Analysis What’s theirvalue? the value of a lost customer depends on: the customer defects to a competing firm or disadopts the product category altogether. Source: http://www.1st2c.com/PDF/What_is_the_True_Value_of_a_Lost_Customer.pdf © 2011 Harvest Consulting LLC
- 6. How’d we losethem in the first place? They had a bad experience. Corrective feedback for your business. Experienced poor service or broken promises. Thank them. Offer to win-back to re-earn their business. © 2011 Harvest Consulting LLC
- 7. How’d we losethem in the first place? You simply lost touch. When do your customers go 'dead‘? What is the customer buying cycle for your business? Sooner you contact them the greater your chance of getting them back. © 2011 Harvest Consulting LLC
- 8. ANNUAL CUSTOMER DEFECTIONRATES Industry Defection Rates Internet service providers U.S. long distance (telephone) German mobile telephone market Clothing catalogs Residential tree and lawn care Newspaper subscriptions Source: Adapted from Griffin and Lowenstein (2001). © 2011 Harvest Consulting LLC
- 9. ANNUAL CUSTOMER DEFECTIONRATES Industry Defection Rates Internet service providers 22% U.S. long distance (telephone) 30% German mobile telephone market 25% Clothing catalogs 25% Residential tree and lawn care 32% Newspaper subscriptions 66% Source: Adapted from Griffin and Lowenstein (2001). © 2011 Harvest Consulting LLC
- 10. Decided to recoverlost customers? Here’s four possible approaches: Do nothing Personal appeal Mass appeal Mix of mass and personal Let’s explore the four approaches… © 2011 Harvest Consulting LLC
- 11. © 2011 HarvestConsulting LLC
- 12. Personal Appeal Handwrittennote. Personal appeal – perhaps a note first (not an email) followed then with a phone call, then lunch, golf and/or a personal visit. Send flowers/ gift basket, a card and then call. Ask them why they left and what would it take from you to get them back as customers. Set aside an hour or two a week for telephoning past customers. It's better to contact five or ten former customers each week, every week because this brings the task down to manageable proportions. The numbers soon build up if you stick to the routine. © 2011 Harvest Consulting LLC
- 13. Personal Appeal Telephone call… "Goodmorning , this is Drew from Acme Anvils. Do you have a minute or two to talk with me now? I’ve been remiss about staying in touch with you, so I thought I'd give you a call, to find out if there's anything I can help you with. I really value your business. What can I do to get you back as a customer?" Now – shut up and listen! © 2011 Harvest Consulting LLC
- 14. Connecting with PastClients in New Ways Reward for complaining Offer them a 'welcome back' discount on their first order. Possibly, “Next time you come in, please ask for me. I'd like to thank you in person for your assistance and make sure you get top- quality service from us and our best possible price." © 2011 Harvest Consulting LLC
- 15. Mass Appeal Flat directmail with an offer. E-blast with an offer, ASI mailed. New menu, product, catalogue, service. Social networking. A survey via postal mail, email or telephone. © 2011 Harvest Consulting LLC
- 16. Surveying/Research With LostCustomers Lost Customer Analysis Project Goal: Learn why InsightBusiness high speed internet services were not chosen over the local telephone company provider or other IT companies/providers • Conducted a total of 65-75 telephone interviews with decision-makers for companies that chose a competitive service • Uncovered key drivers for purchase choice, with forced rankings © 2011 Harvest Consulting LLC
- 17. Surveying/Research With LostCustomers Lost Customer Analysis Project Collected firmographics including: • Type of business (e.g. industry/vertical market) • # of employees • # of computers • New to location? If not new, how long at location. • How long in business • Gathered sources of awareness for InsightBusiness and competitors • Determined measures of satisfaction and competitor loyalty • Defined quantifiable measures of sales performance and experience with InsightBusiness’ sales force • Determined likelihood to switch services © 2011 Harvest Consulting LLC
- 18. Connecting with PastClients in New Ways http://youtu.be/lKfBUUhFueI © 2011 Harvest Consulting LLC
- 19. Connecting with PastClients in New Ways Time For Questions © 2011 Harvest Consulting LLC
- 20. Connecting with PastClients in New Ways Thank You! © 2011 Harvest Consulting LLC
Editor's Notes
- #2 Welcome everybody! My name is Scott Jacobs and I’m the CEO of Harvest Consulting. It is a pleasure to be here. Today, we’re going to talk about Connecting with Lost Customers or Past Clients in New Ways. My partner in crime is Drew McLandrich. He will join in shortly.
- #3 Let’s get started by discussing the objectives for today’s session Customer analysis – what do customers buy from you, how much do they buy, how often, and why do they buy from you Why did they leave you? What can we do to win them back? Do we even want to win them back? (hopefully we will have decided that through the customer analysis) Then we’ll cover some tactical ideas for recovering lost customers Hopefully we’ll have some fun along the way
- #4 Let’s jump right in and talk about customers. Can we all agree that it is more expensive, in terms of sales costs, to win new business or “acquire” customers versus keeping them? British Airways calculates that customer retention efforts return $2 for every dollar invested, "recovered" customers give the airline more of their business, 87% of customers who complained did not defect in the first place! Bottom line here is that we really don’t want to lose them in the first place after we’ve spend a lot of time and money to get them to buy from us in the first place. You have a better chance at regaining an old customer than getting a new one.
- #5 Naturally, the aim is to gain more customers than we lose, right!? A long time ago a boss of mine told me, “you know, if you lose one customer, it will take you two new customers to grow your business.” Not a complicated formula, right? Unless it costs you more to keep a customer than to acquire a new customer, we really need to look at improving customer retention programs as a primary means to grow our businesses. But, if we do want to tap into that pool of lost customers. How should we go about it? How many customers do you currently have and how many do you lose per month or per year? Have they been lost for a long time, when was the last time you spoke with these lost souls? Do you know how to reach out to them? Are you LinkedIn with them, do you have their phone numbers, what about their email address or postal address? How do you determine whether or not is even worth it to recover the lost customers? There are bad customers, aren’t there? I know I had one for about two years and couldn’t wait to lose him!
- #6 Loss of an early adopter, your first set of customers will cost you and your company more in lost sales versus the loss of a later adopter. If a customer sours on products or services in a given category or industry, and customers do as well – the industry in general will take a hit and all companies will suffer (look at what happened in the video rental industry NetFlix brought down Blockbuster) slowdown in the overall category-level sales due to disadoptions of competitors’ products Make certain customers have confidence in you and your business - recently people fled smaller banks to bigger one's as these customers were worried about stability and solvency
- #7 These customers can provide some of the most important corrective feedback for your business. If customers experienced poor service or broken promises, you should fix these issues promptly. If you have corrected the problem, you may now have an opportunity to re-approach the lost customer. Thank customers them bringing problems to your notice, as it's an opportunity to improve your business. Silence really can be deadly. Fix the problem that caused them to leave, guarantee that it will not happen again (or their money back) and invite them to use your business again
- #8 I would contend that if you don’t know how often customer buy from you, how will you know if they are lost? Stay in touch with your customers at least inside the buying cycle. Use your database to determine, for example, if your customers typically buy from you at least once a month, makes sure your database is able to flag the customers who have not bought from you for two months. A Harrah's database identifies customers who haven't visited a casino within a certain period. Knowing this may be a sign of dissatisfaction, the casino calls to find out why, and sends a personal invitation to return along with a coupon. This approach helped drive a 6.5% same-store sales growth in just two quarters. Recognize customers habits and needs are always changing, especially in tough times.
- #12 Can anyone tell me what approach this is? Doing nothing is a good choice for customers that do not provide the opportunity for profit, are “litigious” or “pains in the backside” or just not ones you care to continue to do business with.
- #13 Personal appeal is the best approach when one has a smaller number of customers who produce a proportionally larger profit per transaction.
- #16 Mass appeal is the best approach when one has a large number of customers who produce a proportionally smaller profit per transaction. Always highlight when something new has happened. (e.g. New items in the store or new services are subtle invitation to return) Better training for service staff, noted in direct mail. What are the two most powerful words in advertising? FREE then NEW Dollar incentive to return, mailed to past customers. Focus group of lost customers (discuss Insight example)
- #17 Mixed appeal, is of course, is a proper blend of mass and personal, based on the situation. Examples could be…
- #18 Mixed appeal, is of course, is a proper blend of mass and personal, based on the situation. Examples could be…