Change is a natural part of life. In business, this is especially true.
Even your most loyal customers will eventually move on. This can happen for a number of reasons. Their needs could change, or something better could come along.
Yet while we recognize change is a part of business, it’s important to minimize customer churn.
It’s harder to acquire new customers than retain existing ones. Not only that, but your existing customers will spend more money on the products and services than new ones, because of the trust you have built with them.
This creates more revenue-generating opportunities for your company.
However, simply reducing churn isn’t the whole story. You can also take advantage of customer loyalty by winning back lost customers.
Today, we’ll look at how to create a win-back strategy using customer feedback. More specifically, we’ll identify the key reasons for customer churn, and match each of these with a win-back strategy.
Let’s go!
How to identify reasons for customer churn
Your first step to winning back a customer is figuring out what went wrong in the first place. The simplest way to do that is to hear from them directly. To do this, you need to gather customer feedback.
Of course, for most businesses, trends in customer churn are far more helpful than knowing the exact reason every customer dropped off the grid. Modern customer feedback tools make this fairly simple by using a public board with an upvote/downvote system.
When a piece of feedback gets a lot of upvotes, you can then build a win-back strategy around it.
To figure out what kind of strategy to use, it’s helpful to understand the different types of customer churn. These are called churn factors.
Essentially, all lost customers can be placed into one of four categories:
- Their customer journey has reached its natural end: The customer needed your product for a fixed period of time, which has ended.
- Their needs have changed: The customer now needs something different or something additional which you don’t offer.
- You lost out to a competitor: Somebody else offers what you offer for less money or their product is slightly differentiated.
- The customer no longer sees value: The customer isn’t seeing the return on investment they thought they would.
The final step is to match applicable feedback to one of these categories. All this takes is a little bit of reading between the lines.
Let’s look at the core strategies for addressing each of these churn factors and winning back customers.
1. The customer journey has reached its natural end
In some ways, this is the churn factor that puts you in the best position. That is to say, they were probably happy with your product while they needed it.
However, winning them back isn’t as simple as sitting around waiting for them to come back.
In fact, there are plenty of things you can do to grease the wheels. The good thing is you already have their email address. The key thing is pretty much to maintain contact.
However, there are a couple of rules of thumb to keep in mind.
For example, simply sending sales content to customers who don’t need your services is a surefire way to get unsubscribes. Instead, it’s vital to provide value in your email content.
To do this, I like to do the following:
- Use a content-digest style email funnel for “satisfied customers”
- Focus on content which is relevant to the broader industry, rather than our specific product
- Create and share customer success stories
This final point is crucial. An excellent way to provide extra value to happy customers is to raise their profile with a case study.
2. The customer’s needs have changed
The customer’s needs have changed is a similar churn factor to the customer’s journey reaching its natural end.
The key difference is that the customer now needs something you simply don’t provide. This will show up pretty explicitly in your customer feedback. That is, in most cases, the feedback will actually state that you can’t do something with your product.
When this happens, you have two win-back strategies:
- Add the feature
- Demonstrate that you can achieve the same results with an existing feature
Some feature requests will be things you can reasonably add.
For example, if you provide an SEO tool and someone complains that they can’t get they want to get key information in their browser through a Chrome extension, that’s something you could look into building.
But, if they complain that you don’t allow you to manage their social media accounts, they’re probably a lost cause. So, it’s important to know when to say no to feature requests.
When you can add a feature, the next step is to make customers aware of this.
For example, at Better Proposals, we share every new feature to our email list. Each feature is designed to help our clients write better business proposals. The new features we share are aligned with this goal of helping our customers win new clients.
While we won’t ever win back customers who don’t need our service, we can reduce customer churn by showing customers that we are working on adding features that help them achieve their goal faster or more effectively. Hopefully, both.
3. You lost out to a competitor
We all know about the rational consumer. That is, people will generally choose the cheapest product which meets their needs. We’re wired to maximize value and minimize costs.
Unfortunately, this means you’ll lose customers when someone can offer the same product or service as you do for less. This can be a hard churn factor to overcome.
Essentially, you have two levers you can pull. When customers are choosing between you and your competitor, they make a cost/benefit calculation.
To win out, you have to shift this balance by lowering costs or increasing benefits.
There are a number of other ways you can change your customers’ cost/benefit calculation. For example, you can:
- Offer targeted discounts: For instance, you can charge a lower price for customers who only need certain features.
- Focus on intangible benefits: Often you can’t beat your larger competitors on price. However, you can still beat them on things like personalization, customer service, and industry-specific knowledge.
- Lean on partnerships: Sometimes you lose customers to a large competitor who offers multiple services. A good way to overcome this is to partner with other companies with intersecting audiences. You can then create a combined offering.
In the B2B sphere, you can use any of these strategies to formulate a business proposal to win back lost customers.
4. The customer no longer sees value
One of the most common churn factors is customers failing to get the value they wanted.
This can happen for two reasons:
- Your product wasn’t right for them
- They don’t know how to make the most of it
You can identify if your product wasn’t right for them or they didn’t know how to make the most of it through your customer feedback:
- For example, a complaint that you can’t do something which your product isn’t aimed at means the customer had the wrong expectations.
- A complaint that your product can’t do something when you know it can means that the customer doesn’t know how to maximize the value.
Content marketing can help solve both of these problems. At least, it can prevent the wrong people from buying your product. And, an effective content marketing strategy can also help existing users to make the most of your product.
This all comes down to education.
Here’s the content framework I like to use to reduce the churn from this factor and win back lost customers:
- Implement webinars and demos to onboard customers
- Create industry-specific how-to guides to maximize customer usage
- Publish customer success stories to show how others have benefited from our product
- Use ebooks and whitepapers on industry trends to help put our product in context
None of this is groundbreaking. Instead, the important thing is to have a concrete framework in place to ensure that customers make the most of your product.
When you identify a new churn trend here, it’s also a great source of content inspiration.
Don’t overlook the importance of winning back lost customers
Winning back lost customers a shockingly overlooked growth strategy. The focus is often on eliminating churn, but having a win-back strategy is just as important.
This is pretty much impossible without gathering customer feedback.
That’s because without feedback you can’t identify your core churn factors. That is, you won’t know why customers jump ship.
However, once you have this information, winning back lost customers is a breeze. Lucky for you, there are only a handful of reasons people stop buying from a business. When you understand these, winning back customers becomes a walk in the park.
