Losing a customer is never good news for business owners. Unhappy customers can encourage them to do business with your competitor. And with the massive use of social media, they also tend to share their bad experience with a brand on their own account.
To avoid losing more customers, your business needs to have a look at your retention strategy. It costs 5x more to acquire a new customer than to retain an existing one, which justifies the importance of good customer retention strategy.
When customers are satisfied, they’re likely to repurchase from you and even become brand advocates. But on the other hand, bad customer experience will make them switch to other brands or companies.
The Stats Don’t Lie
Losing a customer is costly. It is made up from four key cost factors; direct, operational, social and acquisition cost.
According to Call Miner, businesses in the US lose about $136.8 billion annually due to poor customer retention.
Although 82% of business leaders agree that customer retention is cheaper than acquisition, only 30% of them make an effort to bring back their lost customers.
Why do Your Customers Leave Your Business?
Let’s admit that no business has zero churn. There will always be churn to some point. You might have unavoidable customer churn that is caused by something you have no power to change, like they move to another country.
But the avoidable customer churn is where you can step in; find the ways to increase your customer retention backed with relevant data insight.
So, why do customers leave your company? Here are some top answers.
1. You provide poor customer service
Based on the customer experience index by Aspect, poor customer service has caused 17% to 25% of customers to stop doing business with companies.
2. Your product does not meet their expectations
Yes, customers can leave because of your products. Some of them may no longer need your product; some think that your product is getting more expensive, and many other reasons.
3. You provide few incentives for your customers
Everybody loves to feel appreciated and your customers, too. A loyalty program can be a great way to retain and build relationships with your customers, but many companies still think that retaining and rewarding their customers is a cost.
How Can You Win Back Lost Customers?
Whether your business is small or large, and product- or service-based, it is important to know the right way to win back your lost customers. Recapturing the lost and keeping them stay with your brand requires the best win back strategy that works with your company.
Here are some ways you can try to win back the customers who haven’t bought anything from your company in a long time.
1. Run a re-engagement email campaign
Utilize your CRM program to send re-engagement email to customers with a certain engagement score level. That way you are telling them that they are not forgotten and dearly missed.
2. Send retargeting campaigns
Set a retargeting campaign with specific ads to your lost customers based on their tracked touch points with you before. Use your data and insight to target this specific customer and remind them about your recent product updates, product recommendation based on their past purchases, etc.
3. Give your lost customers a special incentive to come back
Give your lost customers reason to come back. Special discounts or vouchers can be a great deal breaker because who doesn’t want a good deal, right?
For example you can give 50% off of their next purchase or $10 voucher for free to welcome them back to your business.
Send this offer through email with different subject line to appeal different audiences; like
- Remember us?
- We haven’t seen you in a while
- (name), we missed you!’
- Special discount for (name)
4. Run ‘We Fixed It’ campaign
If you know exactly why your customers stop buying your product or service after investigating your data and feedback, you can run a campaign ‘we fixed it’ to let them know that they heard their complaints and feedback.
For example, if your feedback data showed that your customers had problems with bugs in your software, you can run this campaign once you solve the problem. That way, your customers can see that you actually care with their feedback and bring a solution to the customers.
5. Utilize your social media
Nowadays, customers tend to vent their complaints and frustration to company’ social media accounts. Make sure to reply to those customers in a timely manner with the right answers. You can also use their feedback to launch special campaigns on social media that address their problem in a positive way.
You can also build brand authority through sharing social proof to make your brand look more trustworthy. You can share loyal customers’ reviews, video testimonials from happy customers, study cases and many more.
Level up Your Customer Retention Strategy
It is true that keeping your customers satisfied is not an easy task, but the right customer retention strategy can lead to a company's long term sustainability and revenue growth.
Although there is no exact path to retain customers, the combination of a carefully crafted strategy plus the right tools to execute that strategy will definitely deliver better customer retention and customer experience.
Tada can help you build a customer retention program that is unique to your company. You can choose to run a loyalty program, membership, reseller to special incentive with our highly configurable technology. Request a demo now to know better how Tada can help you build a better loyalty strategy to prevent losing your customers.