SALES

So You Lost Your Biggest Customer ...

Use these 5 simple steps to win back a customer who has jumped ship to another vendor.

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Coping with customer defections can be traumatic. But while it feels like a disaster at the time, the loss of a big customer is actually a signal that you need to realign your sales and support efforts–and lay the groundwork to win the customer back.

Here's a step-by-step plan.

1. Get Out of Denial

You probably think you know why your customer left–but you probably think wrong.  According to an oft-cited study by the research firm CRMGuru, most people believe the primary reason a customer left is that the customer found a lower price elsewhere or the customer's needs changed.  But if you ask buyers why they switched vendors, the reason is usually either "bad customer service" or "poor quality."

The lesson here: Do not assume you know what actually happened.

2. Discover the Real Reason

I don't want to point out the obvious, but: If you don't ask, you're not going to find out.  In other words, you must absolutely speak with the decision-makers who gave your firm the heave-ho.

Approach them respectfully and with a sincere desire to learn and improve.  In some cases, you'll get an earful right off the bat, but in other cases, you'll need to probe to get the honest answers.  Either way, you've need the straight scoop in order to use the situation to your advantage.

3. Fix the Real Problems

If the problem is anything except the "the customer's needs changed"–which, it turns out, is the reason only 14 percent of the time–then you need to address the issue that the customer surfaced.  If your product or your customer service sucks, make the changes necessary to improve them. If your price isn't competitive, either drop the price or figure out a better way to articulate why your higher price is justified.

Fixing the problem, by the way, is the best way to keep a defection of one customer from becoming an exodus of multiple customers.

4. Keep the Relationship Alive

While you're fixing the problems, keep your former customer in the loop.  That doesn't mean pestering the decision-makers with junk emails, but it does mean informing them about the progress of the changes and improvements that you're making.

Any communications along these lines must make it clear that the customer's opinions and complaints are not just being acted upon but are sincerely appreciated.  And if the changes help you win new customers, be sure to thank the former customer.

5. Revisit the Lost Customer

When you're completely sure that you've addressed the issue, it's entirely appropriate to ask the former customer to revisit the decision.  In fact, according to
Susan Scott, author of the best-sellers Fierce Conversations and Fierce Leadership, it's far easier to get former customers to return to the fold than it is to acquire new ones.

And that make sense, if you think about it.  When you exhibit an honest effort to improve, most people are willing to give you another chance.

If you found this column helpful, click one of the "like" buttons or sign up for the free Sales Source "insider" newsletter.

Last updated: Mar 16, 2012

GEOFFREY JAMES | Columnist

Geoffrey James was recently named a "Top 40 Social Selling Marketing Master" by Forbes, and his blog has won awards from the Society of American Business Editors and the American Society of Business Publication Editors. His writing has appeared in publications as diverse as Wired, Brandweek, and Men's Health, and he is the author of numerous books, including The Tao of Programming, Business Wisdom of the Electronic Elite, and, most recently, Business Without the Bullsh*t: 49 Secrets and Shortcuts You Need to Know.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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