Lost Customers can Jump Start Your Sales!

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As I am reviewing one of my latest webinars, “Transforming the service Department: 3 Insights into Achieving Happy, Profitable Customers Through Service,” (http://www.resolvcrm.com/index.php/sharing-our-knowledge/seminars/transforming-service-with-crm-1) I am reminded that while there are many ways to improve customer service and increase customer retention, one of the best ways is to seek out complaints.

I’m not talking about putting a complaint box on your receptionist’s desk either. I’m talking about actively contacting your customers (preferably your best customers) and asking them what your company could do better. I am assuming your customer already likes your product or service, and that’s why they are your customer; I’m thinking you may want to direct them to specific process and communication areas.

You see, there are several surveys out there that talk about why customers leave and in each survey the results are in the vast majority that customer leave for “service problems”. In multiple articles you will see similar results, usually between 68% and 70% of the time customer service is listed as a reason for customer defection. Here are a few articles that chart this out:

http://www.customerthink.com/blog/5_steps_to_better_customer_loyalty_customer_retention_tips

http://marketingjournal.blogspot.com/2005/12/why-customers-leave-part-1.html

Why do customers leave?

http://clientk.com/2009/01/25/why-your-customers-leave/

So you get my point. Customers leave based on a feeling. They don’t feel you appreciate them. They don’t feel like they matter. They don’t feel like you pay enough attention to them. The list could go on and on!

Since about 70% of customer retention is based on a feeling, the best way to find out how to make a customer feel good is to ask them what you can do to improve. Ask in relation to processes like:

• Order placement
• Order processing and notification
• Order fulfillment
• Order delivery
• Post delivery communication
• Overall communication throughout the process

When they share an idea for improvement, seriously consider it, as they are giving you a way to retain them longer as a customer.

The good thing is that 90% of customer retention is about communication. Be proactive in your communication (especially about negative communication – price increases, late delivery, back-order, etc.) and you will have a customer that “feels” your company.

One more tidbit. You most likely have lost customers because of them not “feeling the love.” Well, according to “Customer Winback – How To Recapture Lost Customers – and Keep Them Loyal” by Griffin and Lowenstein, you have a 20-40% chance of closing a sale to a lost customer. This twice as good as your odds of closing a sale to a prospect. Therefore, if you want to boost your sales quickly, review the customers you lost over the last couple of years, determine which ones you want to invite back, and call them and ask them what you can do to win their business back. Then it’s simple, make the change and invite them back.

The better news is a CRM system, implemented in line with your business strategy, can help. Here are a few ways CRM software may help your business:

• Gives you a single source for all customer related data
• Allows you to track and manage and respond complaints and service requests
• Alert you related to your customer
o Next service due
o Follow-up calls
o Change in average order size
o Change in total sales – rolling 12 months
• Alert your customer on your behalf
o Order entered
o Order status updates
o Delivery notification
o Service issue follow-up

5 COMMENTS

  1. Luke, this article reflects exactly where to meet the “Total Customer Experience”. I found that there has been a tendency in “not to know”. Being scared of knowing the customer´s problems, worries, expectations…is in detriment of the business. When a customer is given the chance to talk and BE HEARD, from that very first moment is going to demand less from us. Already there is a well-being feeling. The worst customer attention we receive, the more we will expect and demand- By listening, being proactive, creative in giving solutions to fit the customer´s needs(it is not impossible to please everyone), and above all by “knowing” and not “assuming”, the success is assured. The hardest thing in life is to know. After that, everything is possible. Transformation is a must.
    Excellent article.

  2. It seems to us that there are a couple of items missing in this process:
    1. Have the sales rep whose account it was call the customer who was lost; this is good for relationship building;
    2. Use the points above as the basis of a customer questionnaire for the reps to use;
    3. While doing your CRM database, make it all access among customer facing people, so everyone can see what the nature of the conversation was.

  3. John,

    The ultimate goal would be to realize the relationship with the customer is deteriorating prior to them leaving.

    However, just because a customer has left, doesn’t mean they are gone for good. I would add one step above your step #1. That step would be: “Determine if you want the customer back”. Then you can have the sales rep (or someone else, if the rep is part of the problem) call the customer.

    The biggest thing to keep in mind for step #3 is that the CRM system should be the single source for all data related to the customer (including sales, invoices, service, etc.)

  4. Gemma,

    Thank you, I’m glad you enjoyed the article.

    One of the keys to communication is to remember that when a customer complains, the initial goal is to not just just solve the customer’s problem, it is to allow them to vent the frustrations they have. Once they vent, they can let go of the frustrations and move on.

    Luke

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