Winning back lost customers is an important growth strategy, especially for businesses operating on a recurring revenue model. Think about the efforts, money, and resources you need to acquire a new customer. Instead, why not sharpen and use the old sword?
It is easier to sell to your former customer who is already acquainted with your product. As per a study, there are 20 to 40% chances of winning back an ex-customer and only a 5 to 20 % chance of turning a new prospect into a paying customer.
Your most unhappy customers are your greatest source of learning- Bill Gates
Look at this through an optimistic lens; your unhappy customers are giving you a chance to get better for surpassing your competitors. Rather than abandoning them, find out and fix the problems in your offering. Customers don’t instantly decide to quit.
It is a gradual decision based on the experience of using your product. There might be something lacking or going wrong that showed them the exit door.
- The customers might not be happy with your price
- Your solution isn’t solving their problem
- Your product hasn’t kept up with time
- They feel your competitor is better
To win such lost customers, you need to up your game.
“You can always improve your situation. But you do so by facing it, not by running away” – Brad Warner
Here are a few tips to win back lost customer:
1. Find out why do your customers leave
For winning back lapsed customers, you will have to dig into the reason to understand why they left in the first place. Be honest with yourself while finding the cause. Did you fail to deliver the promised service? Or were they lured away by your competitor offering better prices and benefits?
- Send surveys to learn why the subscribers left and improve your service based on their feedback.
- Reflect on the past sales data and create reports for determining your strengths and weaknesses that gave them a reason to leave.
- Conduct competitive analysis for understanding what’s motivating your customers to buy from your competitors.
2. Spot and segment the lost customers
There are some past accounts that you shouldn’t touch as you will just end up wasting your time. Analyze the wealth of information you have about your customers and find out potential win-back targets.
Separate the wheat from the chaff by segmenting the customers to estimate how likely are the chances for a specific client to return.
Create four segments from the database of lost customers to create win-back strategies and prioritize your time productively:
- Unprofitable customers whom you removed from the sales pipeline (accounts not to be touched)
- Customers who were price sensitive
- Those who were attracted to your competitors due to special offers and additional features
- Customers whose expectations you couldn’t meet
3. Take responsibility for the inconvenience caused and offer special discounts
Overselling and under-delivering can endanger customer relationships. That is why you should always choose your words wisely while communicating with your clients to avoid churns.
If your customer canceled the subscription due to some genuine glitches, then take the responsibility of the issue and extend a sincere apology.
- To compensate, offer special discounts
- Try to regain their trust with dedicated services
- Reduce the price of your subscription service for a few months
4. Keep upgrading your features
Customers want to work with the best; so, ensure you always stay updated with the changing trends. Keep upgrading and introducing new features for providing optimum user experience.
Discuss the issues your former customers faced while using your product. Don’t only try to make a minor adjustment but focus on improving your product.
- Invest a little in upgrades and new features to attract the old customers
- For example, Netflix is planning to spend around 85% on original content for keeping its subscribers hooked
- Don’t lose hope; contact your lost customers after the upgrades and demonstrate the value of your product properly
5. Use emails to reach your lost customers
Make the most of the email addresses lying in your contact database. Through effective email campaigns, try to get back customers who ceased to pay.
Use various strategies like asking them “do you want us to take you off the newsletter list?” If they give a positive response, then you still have an opportunity to convince them.
- Send newsletters about new upgrades and features
- Keep sending emails about special offers and discounts
- Send greeting emails on festivals and special occasions to make them feel special
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There is always a way to get back the lost customers. Don’t give up easily; you just need to explore all the possibilities and strategies to attract them again. Your former customers know you, so you don’t need to put in the extra effort.
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We built two consulting agency businesses from scratch using these techniques.