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Who goes around, comes around

Martin Wake explains why winning back lapsed customers could be the secret of your success.

Martin Wake, Infomatics 25 Feb 2003
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"It is always easier to repeat sell to an existing customer than to anyone else," according to John Frazer-Robinson, co-author of High-Performance Sales Management (David Grant Publishing). "Typical figures suggest that it is at least five times easier."

Lapsed customers may not quite count as 'existing customers', of course, but they are not undiscovered prospects either.

Of the many benefits of exploring the sleepy backwaters of your customer list, the best is that here, on a plate, is a ready source of pre-qualified leads. They know who you are and what you do. So how do you get them back?

"For whatever reason your customer lapsed, always apologise for past failings and be able to demonstrate that your business has changed and moved forward," explained Carl Boraman, sales and marketing director at Axxent Voice and Data Communications.

"If your customer left because of price, you can always go back to them with a special deal that improves upon the current deal."

If you have actively dissatisfied former customers on your list, there's your angle. Apostles (satisfied customers) will on average tell three or four others about you; terrorists (unhappy customers) will moan about you to 10 others.

But taking positive action to address an earlier grievance can turn a potential 'terrorist' into an 'apostle', and converted terrorists make the best apostles of all.

"If the relationship has severely deteriorated, do something that shows you are making an effort to put this right," said Chris Hooton, business development executive at KCentrix Software.

"If the client felt they were receiving poor service, then take the service director to meet them to show your company cares."

Boraman added: "If service was an issue, you can prove that you have restructured and now focus heavily on service through testimonials."

Getting in touch with old customers has strong networking and data-quality benefits.

If your original contact has moved on, you can find out where they've gone and acquaint yourself with the new decision maker, giving you two leads for the price of one.

Your old contact may have moved somewhere where they have a bigger budget for your services or your old contact may have been the problem. You now have a clean slate, no preconceptions and the chance of a fresh start.

Newer customers can help you go back to older ones too. "If you've made a new customer that's related to the lapsed customer, like a supplier or strategic partner, they may reconsider taking your services on with a direct reference," suggested Marcos Richardson, European director at Webtraffiq.

Making your approach
Do your research. Keep track of moves in your industry sector and think about how they apply to your client.

"It's no good just picking up the phone as though your lapsed customers were long-lost friends," warned James Donaldson, global sales director at Business Agility.

"In the course of a few months, the whole market can shift, leaving your customer vulnerable to a host of new challenges. So do your homework and tailor your proposition."

Always have something to say
"Never call a prospect of any kind under the guise of 'updating the database'," advised Simon Bull, reseller sales manager for Oki Systems UK.

"You will always have new products or services to talk to them about; use this as your way in. You need to be seen as a service provider, not someone wasting their time."

Push your profile
"Leads can be reawakened by the offer of a joint marketing activity," according to Lorraine Emmett, managing director of Emmett & Smith.

"Invite them to take part in a jointly penned opinion piece with your own MD, or a round-table discussion on an industry hot topic with some other contacts, prospects and clients.

"Offer an exclusive service or product preview; undertake some research then invite the participants to an exclusive preview of the findings. These give you an excuse to make that follow-up call."

Be creative
One executive encouraged a marketing student on placement to carry out a project looking at the company's marketplace.

"As part of her research, she polled ex-customers about how many of our newly extended range of services they were aware of. We got some software training business as a result, from a company which did not know we had added this service."

Ignoring customers is a cardinal sales sin, of course, so whatever approach you take: just do it. "Above all, don't spend hours thinking up an elaborate excuse for the call," said Hooton. "Just pick up the phone and talk."

CHECKLIST:

  • Find out why the relationship has lapsed
  • Right any perceived wrongs
  • Go back with something concrete to offer
  • Make sure you're up to date on customer developments
  • Try a new entry point, say a different contact or a recommendation from another customer
  • Be as keen and confident about winning them back as you would about any new prospects
  • Just do it!

All IT Management

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