Sales professionals know intuitive that selling to existing customers is easier than acquiring new ones. Research bears this out. Prospecting for new customers has a success rate as low as 5 percent while selling to existing customers has a success rate as high as 70 percent, according to Jill Griffin and Michael Lowenstein, writing in their excellent book Customer Winback.
What's less well-known is that selling to former customers is also easier than acquiring new ones. In fact, average success rates for turning former customers into current ones range from 20 percent to 40 percent!
However, recovering lost customers is only possible if you're willing to find out why they left in the first place.
Unfortunately, many sales professionals are often clueless when it comes to understanding why their customer leave. According to a study conducted by the firm CRMGuru, almost half of all sales managers believe that the primary reason that customers leave is that they found a lower price somewhere else. And another third believe that the primary reason is that the customer's "needs changed."
WRONG, WRONG, WRONG.
That same revealed that, when customers stop using a product or service, the reason is almost always either bad customer service (cited by 74 percent of respondents) or poor quality (cited 32 percent of respondents). Price was only an issue for only a quarter of the respondents, and product functionality (i.e. "needs changed") came in at a measly 14 percent!
Blaming price and functionality makes it virtually impossible to re-acquire lost customers, because when you contact them, you'll inevitably address the wrong issues. You'll start talking about discounts or a new version of the product. Meanwhile the former customer is probably thinking: "these guys sold me a piece of crap and didn't fix it fast enough."
When you're looking to win back a customer, the first order of business, therefore, is to find out the REAL reason that the customer bailed. The ONLY way to do this is to summon up the courage to ask, honestly and humbly, with the full expectation that you might get an earful of unpleasantness.
Once you've figured out where you (or your firm) screwed up, then you can apologize and explain what's changed since then to ensure that the customer will have a better experience. This is easier than you think, because even though the customer was annoyed enough to leave, there must have been SOMETHING about your offering was appealing.
In many cases, former customers WANT to come back to the fold, providing the issue that caused them to leave is being addressed.
NOTE: The above is based on materials provided to me by the Chally Group. I'm currently working with their CEO, Howard Stevens, on a book which will (I assure you) completely change the way that you think about sales as a profession. Amazing stuff, so stay tuned.