We all know that keeping your customers for the long run is vital to your company’s success. Ivana Taylor’s American Express article and Patrick Hull’s Forbes post remind us of a commonly cited statistic: a current customer is 60-70% more likely to make a purchase, as compared to 5-10% for a new prospect. Key customers are even more central to your long-term success than regular customers, so it pays to spend a bit more time and energy to retain and win back a key customer who has been lost to a competitor. Here are some tips on how to win back an account with a key customer, and what to keep in mind when you choose your methods:
Find the real reason.
In Geoffrey James’ five-step client win-back strategy, the first steps include facing the possibility that something went wrong on the company’s end. The benign reason the account manager hopes is the problem — the customer found lower prices elsewhere — is frequently much different than the actual reason the customer gives. That being said, talk to the customer directly and ask why they left. While some customers welcome the opportunity to share their complaints, others may take some coaching to open up. Really listen and empathize, allowing the customer to give you honest feedback about what they felt went wrong.
Fix the problem.
James reminds us that only 14% of the time will the customer’s real reason be that their “needs have changed.” When it’s more than that — a delay in the service delivery process, a customer support issue, or poor product quality — it’s time to reach out to the contacts inside your organization with whom you have developed relationships. Whether it’s the head of operations or the customer support lead, depending on the reason for leaving cited by the client, use their assistance to repair the relationship with your key account.
Send updates to your former customers on how you are solving the problem they pointed out.
For instance, if the customer still decides not to return, maintain a relationship with them. Keep in touch with them periodically and find ways (including gifts, discounts, or other incentives) to let them know they will always be welcomed back. In addition, Taylor and James recommend that you keep them informed about how your company is working to fix the problem. Update the client on any changes, improvements, or approaches to how your organization handles the issue they pointed out. Even if they decide not to return, they may recognize your long-term efforts and serve as a referral for future clients.
Keep in mind that the likelihood of a customer coming back depends upon why they left.
This HBR article cites a study by Georgia State University professor V. Kumar, who researches strategies on how to win back lost clients. Kumar found that customers who left for varying reasons will also vary in their likelihood of returning. For instance, Kumar found that those who left because of price are more likely to return than those who left because of poor service. Tellingly, customers who gave both reasons were the least likely of all to return.
Tailor your solution towards the reasons given, and keep in mind your ROI.
Once you know why the customer left and their likelihood of returning, tailor a solution for them. However, Kumar reminds us that some solutions cost more than others to fix. In Kumar’s study, the former customer that cited the reason for leaving as “found lower prices elsewhere,” received a discount — the least expensive remedy in that scenario. At the same time, this solution produced a slightly lower return on investment than the others, and might not be the right solution for a key customer who has left for more serious issues.
When you have lost a key customer, make a point of getting to the bottom of the problem. Fix the issue, even if the clients are no longer interested in coming back, and update them appropriately to show that your company is taking their input seriously. Lastly, offer tailor-made solutions, keeping in mind that not all key customers are the same, not all problems merit the same solution, and not all solutions bring in the same return on investment.
Curious to see how you can take your Key Account Management skills to the next level? Download this helpful ebook on how to create powerful engagement plans for your key accounts or sign up for a demo of Kapta.