How to Win Back Lost Customers in B2B
Joachim Meyn has many years of experience in B2B sales and customer management. In this article, he shares his impressions on the topic of “customer recovery”.
First of all, losing customers is an entirely normal process. Therefore, one of the reasons to conduct systematic new customer acquisition is to replace these departing customers.
However, you should remember that it is about 10 to 11 times more expensive to acquire a new customer than to retain an existing one. It is therefore advisable to devote a certain amount of effort and resources to customer retention. But what happens when it is already too late?
First and foremost, it makes sense to analyze the reasons. Some companies immediately act reflexively with a significant price reduction to bring back a customer.
But often enough, the price is not the real reason for the churn, and one should also consider the consequences of such a price reduction. Massively lowered prices to win back a customer, word gets around. Get the word out. As a consequence, you will quickly have price talks throughout your customer base at once. So first, analyze the reasons by talking to the customer.
There are many reasons besides the price why a customer leaves; here are the most important ones:
– The customer no longer needs your product/service. Unfortunately, you can’t win anything back. However, you may be able to convince him of another product/service.
– The customer is insolvent. Again, you probably can’t win anything back, but watch, maybe the customer will get back on his feet – he wouldn’t be the first.
– Unreliability. Probably one of the main reasons for losing customers. When promises are not kept, it often causes high follow-up costs and annoyance for the customer. Most of the time, it’s not even the big things, but even when minor things pile up, it causes trouble on the customer side. Here you could go through your customer journey again to identify such “pain points”. If you encounter one customer, there’s a good chance that other customers will be affected as well. Show that you are on the case and take the customer’s problems seriously.
– Your product is technically outdated. At this point, a massive price cut could help bridge the gap until you catch up technically.
– Quality deficiencies. That is where things get tight. The customer may be willing to accept poor quality if the price is correspondingly low. But the question is how long you can keep this up and how long the customer will bear the situation. Germany is a market in which high quality is expected.
As you can see, there is no patent remedy for winning back customers because the reasons for this vary greatly. You must take action on a situation-specific basis. In addition, it is not impossible in practice, but turning things around once a customer has already left is tough.
Prevention is the Be-All and End-All
What does that tell us? Prevention is king. So there are many things you can and should do to prevent it from happening in the first place. The most crucial point in customer recovery is prevention or customer retention. That means intervening before the customer’s final decision has been made. And considering the cost of acquiring a new customer, there is enough financial scope for prevention and customer retention.
However, for prevention to be successful, you must first be able to recognize that a customer is toying with churn thoughts.
There are warning signals, such as increasingly longer intervals between purchases by the customer or creeping smaller and smaller quantities. You probably notice these signals with your largest customers, who you keep a close eye on anyway. But with a customer base of over 1000 customers, it is impossible to keep a close eye on all of them.
Today, customer churn functions (churn prediction or churn risk) of modern AI software systems support us in this. These can very reliably detect whether a customer is about to leave. The software immediately notices changes in the buying behaviour of your customers, and your sales team is warned.
You can use this to initiate customer retention measures and thus reduce the risk by up to 50%. For the remaining 50%, you then actually have to initiate customer recovery. Because as said at the beginning, customer loss will always happen. The only question is how to contain it as best you can and avoid unnecessary losses.
Customer Win-Back in B2B – To Do and Conclusion.
Prevention is the best strategy. Use the computing power of AI systems, such as predictive sales analytics software, to continuously monitor your customers and identify customers who are ready to churn in time.
Good AI will also help you with pricing and sales strategies, so that customer churn doesn’t happen in the first place, if possible.
However, if the customer has left for the competition, sit down with the customer. Analyze with the customer where the problem lies. Develop solutions, possibly together with the customer. Often the price is not the real problem.