National
Clothesline
How to win back lost customers
Most businesses should consider spending
more on their current customer base and less on new customer
acquisition as a means to increase profits.
Once the relationship between cost and
value is examined, in regards to acquisition, loyalty and
retention, attracting high potential customers and doing all
you can to retain them, is the next step.
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Less than 50 percent of drycleaners
monitor defection rates, 50 percent don’t know how many
customers they could win back, and even more don’t
conduct defection interviews with lost customers. Most
drycleaners think there is no chance of reviving a lost
customer.
On average, drycleaners lose 20 percent
of their customers annually. Let’s say you have 3,000
customers and want to grow your customer base by 25 percent
annually. Because you lose 20 percent of your customers
annually, you need to add 1,350 to achieve your goal.
Many lapsed customers are
“dormant” and are waiting to be resuscitated. But a
full-scale win-back plan can’t just kick in when a
customer defects. It has to be planned for. It’s best to
catch customers before they settle into a new routine with a
competitor.
Drycleaners should analyze lost customers
more closely. Use your database to look for common
denominators, patterns and trends among defected customers.
Identify and communicate with current customers who match the
profile of defectors to protect at-risk customers from
defection.
What should you do if you don’t
have data about lost customers?
Survey them.
Surveys can be a key tool to help learn
why customers defect — whether there were quality issues
or service issues — and to learn which competitors
they’re using or if they’ve moved out of your
market.
Identifying the reasons for defection
allows you to distinguish between the avoidable and unavoidable
reasons. Some high-maintenance customers may be determined to
be “unprofitable to serve” and should not be
courted.
Other defectors may have been
unintentionally pushed away because your services did not meet
their expectations. Or they could be pulled away by a
competitor who offers better value, service, quality, etc.
You’ll never know if you don’t ask.
It’s hard to compete when customers
are bought away. Customers for whom it’s all about price
— who are attracted by low-ball or introductory price
offers — are most likely to churn.
The best way to compete is to not build
your relationship with your customers solely on price. A
business relationship based solely on price can only be
temporary.
Some defectors may have moved away
because of changes in their job or lifestyle. The best ways to
detect customers’ real reasons for defecting are:
Review account histories focusing on both
the size and frequency of their orders.
Conduct in-depth exit interviews by
phone, mail or e-mail. Be prepared to learn the unexpected.
Consider the timing. Try to get as much
information right after a customer has defected. This is the
time when they are most likely to share their true reasons.
Separate reasons as emotional or logical.
Sometimes emotional defections are easy to repair, once the
reasons for the defection are identified. Logical reasons, such
as moving out of the area, may not be rectifiable.
Finally, identify opportunities among
defector groups and develop offers that will immediately win
them back.
What are those offers? Ask them as part
of the interview: What would it take to bring you back as our
customer?
Customers leave when they perceive an
attitude that says, “We don’t care.”
Customers all want to be treated with respect and made to feel
their problems have been understood.
The focus on loyalty and retention begins
at customer birth. Building a binding relationship, as quickly
as possible, with new customers should be the cornerstone on
which your business is built.
Every drycleaner can benefit from a
systematized win-back process.
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