A Guide to Winning Back Lost Customers

Winning back lost customers is key to generating long term profits in your Shopify or Woocommerce store.

When it comes to determining the key factors ecommerce businesses are dependent upon in order to be successful, building strong relationships with customers so they stick around for long, tops the list. This is because it is one of the most widely accepted precepts of the business world that winning new customers is costly; it can cost up to five times more than to retain an existing customer, according to Forrester Research.

Knowing the importance of customer retention, online marketers invest a huge amount of their time and money in it. However, things do not always go as planned and businesses end up losing many customers. As explained by Jill Griffin and Michael W. Lowenstein in the book Customer Winback: How to Recapture Lost Customers – And Keep Them Loyal, an average company loses around 20% to 40% of its customers every year. In spite of knowing that the ultimate cost of losing customers is very high, most companies do very little to bring them back because they consider them as dead opportunities. However, this is not the case in reality.

Research has shown that there are far more chances of winning back lapsed customers, provided you work for it, than acquiring new customers and getting business from them.

Here’s how you can win back lost customers:

Find Out Why They Left

As an ecommerce business owner or manager, the most important thing for you to know is that customers do not walk away or break their relationship with your company without any reason. However, the majority (around 96%) of them won’t tell why they stopped buying from you, unless you ask them. This is why expert marketers recommend getting regular feedback from your customers by staying in touch, conducting surveys or asking them to fill out a short feedback form after every purchase. Interacting with your audience on social media also helps to gain insight into what they think about your products and company.

A huge mistake many ecommerce businesses make is that they don’t reach out to customers. Instead, they wait for them to provide feedback. While social media and review sites have made it a lot easier for consumers to share their opinions and experiences with others, research shows that only a very few actually use these platforms to voice their concerns or problems; for every customer who complains, there are about 26 who do not give any feedback to the company.

However, this doesn’t mean they remain silent. They just take out their frustration elsewhere. On average, each unhappy customer shares the experience with eleven people, each of whom tells five others. Now imagine the harm these unhappy customers would do to your brand reputation, if you leave them on their own.

In order to bring the unhappy or lost customers back, it is critical that you know why they left in the first place. According to research, poor customer service and dissatisfaction with the product or service are the most common reasons customers decide to cut-off their relationship with a company.

In view of these factors, it wouldn’t be wrong to say that winning back a lost customer isn’t just about getting back lost business, but also about securing your company’s reputation.

Ask to Talk

Start your customer win-back campaign by reaching out to the lapsed customers and asking them if they are willing to discuss the problems they faced. While some customers may refuse to talk, it is likely that many will agree and with every customer who agrees to talk, you win an opportunity to win them back.

This opportunity, however, can only be achieved when your customer service representatives get in touch with the customers; the generic auto-generated survey forms do not serve the purpose. Getting in touch with them directly can help you to start a conversation and get their attention. And it is only when you have their attention that you can persuade them to come back. Talking to your lapsed customers is the first step in restoring or rebuilding your relationship with them.

Acknowledge the Issues

Since ecommerce businesses operate in a customer-centered economy, they have to make sure that their products or services are structured around the needs and demands of customers. If your customers identify a fault in your product, a loophole in your service, or think that you do not provide the value that you claim to offer, the best thing you can do is to acknowledge the problem and promise to resolve it. This will help you earn a second chance and an opportunity to regain their trust.

Fix the Problems

Acknowledging problems is just the first step that you take on the way to winning back your lost customers. It has to be followed by practical measures to fix the problems that made them walk away. A huge mistake that many ecommerce businesses make is that they do nothing after acknowledging the issues. If anything, it’s going to make things worse for you because the customer would feel deceived and is highly likely to be lost forever.

An important thing to note here is that you shouldn’t place any conditions on unhappy customers or force them to come back because this, again, will further alienate them. Instead, just tell that you want to make up for the problem they faced because you value your customers.

Even if this won’t bring them back, there are high chances that they will share their experience with others and may recommend you as well.

Compensate or Offer Incentives

Depending on the nature of the problem, your business and how long after the bad experience you learnt about it, you can please the lapsed customer by compensating for their loss or by incentivizing their return.

For example, if you lost the customer due to a fault in your product and you learn about it shortly after it happened, you can replace the faulty product with a new one. But, when replacing is not an option – if you are offering a service, if a customer had a bad experience with one of your employees, or if you identify the problem a long time after it happened – offering incentives, such as exclusive discounts or premium services, is a great way to win them back.

Turn Lemons into Lemonade – Take Lapsed/ Lost Customers as Opportunities for Growth

No one likes to receive negative feedback or lose business, but instead of losing heart, take these as challenges and see them as opportunities for growth; that’s what successful businesses do. Churned customers make you revisit your manufacturing, marketing, and customer service methods and strategies and to figure out the faults in them. You can also reach out to the customers to find out what bothered them and made them take away their business to someone else. Once you know the issues, you can work on your shortcomings to avoid frustrating more customers.

Every business makes mistakes and ends up upsetting and/or losing customers as a result. But, what sets successful businesses apart from the unsuccessful ones is the way they handle those agitated or lost customers. Research has shown that if you address their issues and fix the problem quickly, it is highly likely that many customers will come back and become more loyal to your business than they would if they hadn’t faced the problem – a phenomenon known as ‘service recovery paradox’.

Every negative feedback or unhappy or lost customer gives you the opportunity to demonstrate your existing and potential customers how much you value their feedback and care for them.

Deal With Angry Customers the Disney Way

Walt Disney is one of the few companies with the largest and most diverse customer base. The company hosts around 135 million customers every year, ranging from toddlers to 90-year-old grandparents, and we all know how brilliantly they have been dealing with them.

Disney uses the HEARD technique to deal with their angry customers.

  • Hear– listen to your customers, without interrupting.
  • Empathize– tell them that you understand their problem and how they feel.
  • Apologize– own the problem and genuinely apologize for it.
  • Resolve– resolve the problem as soon as possible.
  • Diagnose– identify the root cause and fix it to make sure it won’t happen again.

Tell Your Customers What You Did To Ensure the Problem Won’t Happen Again

Customers want to be heard and valued and one way of ensuring them that they are heard and valued is to share with them the measure you have taken to make sure the problem(s) won’t occur again. Modern-day customers are smart; you cannot win their trust back just by telling that you will take measures to address the issues they faced. They want to know what exactly you did. For example, if there was a problem with your product, tell them what you are doing for improving it.

Starbucks, a company that deals with hundreds of thousands of customers every day, knows how important it is to tell your customers the measures you have taken. That’s why it has incorporated it into its customer service recovery approach – LATTE.

Here’s what it stands for:

  • Listen to the customer
  • Acknowledge the problem
  • Take action to solve the issue
  • Thank the customer
  • Explain what you did

While you may not be able to win back all the lost customers by following these steps, you will get back many of them. Furthermore, these will allow you to significantly reduce the number of customers you lose every year.

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