“I’m not coming back and I don’t really like you anyway!” In the framework of the Loyalty Matrix, that is essentially what a “high risk” customer is saying.
Based on their feedback to a short battery of questions, high risk customers are negative on the two key aspects of loyalty – behavior (what a customer plans to do) and attitude (how they feel about working with your company). So, how do you handle high risk customers? While the first reaction may be to scramble to salvage every relationship, that may not always be the best direction. Below are three very different scenarios with suggested action:
SCENARIO 1 – THE B-to-C COMPANY
In this scenario, you won’t likely know at an individual level which customers are high risk. Instead, you’ll know what percentage of your customers are high risk and you need to dig deeper to understand why. You may need to filter the information to find out if high risk customers are concentrated in a particular region or if they are users of a particular product. Essentially, you have to get to the root of the issues and take action to decrease your overall rate of customer churn.
SCENARIO 2 – INDIVIDUAL CUSTOMER CONTACTS
In most B-to-B situations and some B-to-C situations you will be able to identify specific high risk customers and contacts. In this situation you should layer on more information. For instance, if you know how much revenue the customer generates or you know the customer’s level of profitability you can prioritize which customers deserve immediate action to salvage the relationship and which customers may actually be better off with one of your competitors.
SCENARIO 3 – COMPLEX STRATEGIC ACCOUNTS
Lets say you have a single account with 25 contacts — 10 are loyal, 10 are trapped, and five are high risk. Now things are a little more complicated. In this scenario you must look more closely. If the five high risk contacts aren’t that involved or just influence purchasing decisions, the situation may not be dire. However, if a senior executive or your primary contact happen to be high risk, immediate follow up is necessary. A closer look will provide the direction.
High risk customers should prompt action. What action to take will depend on the steps you follow to better understand each scenario.
Patrick Gibbons
Principal, SVP
Walker
