Bruce’s View: Don’t give up on lost customers

April 8, 2016 -  By
Bruce Wilson

Bruce Wilson

Lost customers are always customers, whether they continue doing business with you or not. Most of the time, we forge ahead when we lose a client. We focus on generating new business, ways to keep existing business and simply moving on from the accounts we lose. But ignoring lost business leaves money on the table. Develop a plan to get them back.

First, gather data that identifies which lost customers are most likely to return and which customers would be most profitable if they did. How the relationship ended is significant. If you didn’t lose the customer over service or quality—or if there was a glitch that you made good on by serving the customer at a high level even after receiving the cancellation notice, it’s likely you can win them back.

The customer may not be having his or her needs met by the new service provider. Keeping in touch and taking the high road may pay off if the new company stumbles.

Weigh how much effort to put into re-engagement against the potential value of the recovered customer. Consider:

  1. Gross margin on the primary contract work. Is it a profitable job or book of business?
  2. How much do they invest in enhancements?
  3. Have they given you referrals in the past?

The stronger these three metrics, the more effort is justified. Over time, my experience is this effort yields a higher close rate than bidding new work.

This article is tagged with , , , and posted in 0416

About the Author:

The author, of the Wilson-Oyler Group, is a 30-year industry veteran. Reach him at bwilson@wilson-oyler.com.

Comments are currently closed.