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  • Writer's pictureManish Nepal

How to win back lost customers? 5 strategies help you recover from churn

Winning back lost customers is as important as getting new customers for your business.

Research has also proven time and again that it’s 5X cheaper to retain existing customers than to acquire new ones. In that sense, retaining customers on the brink of attrition is critical for your business’ growth, revenue, and longevity.

But it’s challenging to stop a customer from leaving if you don’t know what’s making them leave your business in the first place. Most software customer journeys usually look like this: new customers discover your product, play around with it for a while, sign for a trial (if you offer trials), convert into paying customers, and—one unhappy day—they churn. Keep reading to know the common reasons for customer churn and tips on how to reduce this critical KPI.

Why do customers churn?

If customers are canceling their membership, backing out of a deal, or dropping off of your subscription plan, there is probably a deeper-level problem that’s making them turn their backs on you.

As a business, you should find answers to the following questions to identify that elephant in the room:

  • Is it the pricing model that’s creating a problem?

  • Is it because the customers are not getting value out of the products?

  • Did your customers find a better, more affordable alternative?

  • Is it because they had a bad experience, such as repeated downtime or lack of support?

  • Is it something else?

You can expand the list to incorporate more questions, but the next step is to pose these questions directly to your customers who are in danger of moving away. You can use online survey tools such as Google Forms, SurveyMonkey, or Typeform to create simple surveys to identify a definitive pattern for customer churn.

But be warned, it’s often a mistake to take the responses of such surveys as it is without diving deeper into the problem. For example, the surveyed customers might say that they were irritated by the number of bugs they reported in your product. In reality, the problem could be the time your tech support took to fix those bugs. Every product is riddled with issues, but what makes it less problematic is how soon they respond to those issues.

A great way to understand your customers’ psyche is to carry out a root cause analysis (RCA). You ask a series of progressive ‘why’ questions to identify what is causing a problem. RCA doesn’t stop at the first instance of encountering a problem; it goes deeper into a reported issue to find the ultimate source of the problem.

Surveying customers and running an RCA is a great way to understand lost customers’ grievances, but what if they don’t respond to your survey requests? You can apply principles of Design Thinking to understand customer problems in such cases. It suggests empathizing with customers, defining their needs and experiences, challenging the assumptions around the solution you provide, implementing new solutions, and testing them.

Validating your hypothesis is essential to identify the major deal breakers on customers’ part and create relevant campaigns to reduce the number of defecting customers in the future and bring down your churn rate.

How to win back lost customers – 5 strategies that work

Once you identify the major causes of why clients are breaking up with your business, you can develop relevant solutions to win them back. Here are a few useful strategies to recover lost customers:

1. Target the right customers

While each and every customer is important, it is sometimes important to prioritize which customers need a little extra time and effort in order to keep their business. Trying to win back all your customers is not a good win-back strategy and will cost you money and time. Target customers who have a good lifetime value and contribute to your MRR. Analyze your customer data and find out who has stayed longer and spent more on your business.

On the other hand, if a customer complains a lot about your business, they are unlikely to come back. So target customers who are likely to return and stay with your business.

2. Personalize your communication

Research indicates that 80% of customers are more likely to do business with a company that offers personalized support. You can send personalized emails and messages via chat to communicate with your customers directly. Begin your customer conversation with their name to make them feel valued and enhance your customer experience. You can also deploy a chatbot to offer personalized customer engagement. Chatbots can easily pull up customer data from your CRM software and send proactive and exit intent messages to your customers to make them stay back.

A good example of personalized and empathetic customer service during these tough covid times comes from Instantprint.

Instantprint introduced a brand new service for video consultations to help concerned customers have a one-on-one, live agent interaction.

3. Collect feedback and address the problem

Collecting feedback from customers makes them feel valued. Feedback from your customers helps you understand what they like and dislike about your products/services. Rather than sending out surveys and forms, deploy a chatbot that will collect customer feedback and engage with them.

Once you have collected your customer feedback, you should act on the negative ones. Develop a win-back strategy around your customer pain points. While you address the negative ones, make sure you also thank your customers for their positive feedback. This will improve customer retention.

4. Offer incentives for their return

Make your win-back strategy more powerful by offering incentives for their return. In fact, 86% of the customers are willing to pay more for a better customer service experience. This can be discount coupons, premium features, early access to deals, and free products. Sending out personalized messages along with incentives might convince your customers to do business with you again. Winning your customers back once they have churned is termed service recovery.

Service recovery is a phenomenon where a customer feels a higher level of satisfaction towards a company after a successful service recovery. Having a service recovery plan in place will help you win your customers back immediately. It will also boost customer loyalty and customer satisfaction. Also, ensure that the promotion offers value and is not a cheap customer acquisition strategy.

5. Measure your efforts

Tracking results is very crucial for any strategies or marketing efforts to put in. Track engagement and reactivation rates for your campaigns and optimize your campaigns and strategies. These data will help you better plan your time and money for your customer win-back campaigns. You might also get customers who reactivate and then quit again. So it is crucial to track their activity and lifetime value. This will give you a complete understanding and success rate of your reactivation campaigns.

What are the different mediums you can leverage to win customers back?

1. Live chat

Live chat is the best tool to facilitate real-time engagement with customers on your website or app. Ideally, you can maximize the power of live chat even before customers leave. For example, suppose they move their cursor to the exit tab, or perform specific actions such as clicking on the “unsubscribe” or “cancel membership” button. In that case, you can trigger relevant chat messages right then and there to convince them against their decision to move away.

Or, you can regularly run a CSAT survey or monitor your brand’s NPS via live chat to understand the common customer sentiment and prevent them from churning in real-time. Another added benefit of live chat is that your agents are right there diagnosing the problem and attempting to dig deeper into what caused the potential attrition, and looking for possible solutions that work for the customer.

E-commerce businesses, such as, use Freshdesk Messaging to stop its customers from dropping off before it’s too late. With Freshdesk Messaging, Poundit runs triggered messages on their website to proactively communicate about a deal or an offer to visitors. The call-to-action (CTA) on the message takes visitors to the webpage where they can view the latest deals, helping with navigation and purchase. These campaigns resulted in 50% increase in visitor response and another 50% increase in sales for Poundit.

The other use case of live chat in the context of re-engaging lost customers is to use it in combination with emails or retargeting ads. For example, if you have made a compelling case for making lost customers come back to your website via banner ads or personalized emails, give them a hero’s welcome on their return. Personalize your live chat messages to woo them back and offer irresistible instant gratification. A successful marketing campaign is not just about what you are selling but how you are selling it.

2. Retargeting ads

Marketers mostly rely on retargeting ads to convert new website visitors into customers because they can help convert up to 70% of new website visitors. Retargeting ads are effective because the strategy requires you to plant web cookies on a visitor’s browser (with their consent) and follow them everywhere they go. It creates a recall that progresses from consideration to action.

But there’s no reason why you can’t apply remarketing to win back lapsed customers. With this strategy, you can exploit several channels to get back their attention. For example, you can show them your banner ads on any websites they visit. Facebook is the best real estate for retargeting ads because it makes the ads look like they are just another post in the users’ feed.

A good example here is Grammarly. When you remove Grammarly’s Chrome extension from a browser, you will notice banner ads on websites you visit for the next couple of weeks. Here’s an email that Grammarly sends alongside those ads to divorced users:

Retargeting ads can do wonders to recover lost customers if you do it well. You have to package it well, make sure the ads aren’t sickeningly omnipresent and give a compelling incentive for customers to come back to your brand. There is a fine line between carrying out a well-done retargeting campaign and bombarding them with a deluge of ads. They will distance themselves further apart from your brand if you flood them with ads all the time.

3. Emails

Email can be a more direct, personalized, and powerful approach to win back lost customers. You can create a one-time email campaign or treat it like a drip campaign for customers who have churned away from your brand. You can also test this strategy with text messages or use it in sync with your email re-engagement campaign.

While the messaging principle applies to all strategies—offer an appealing incentive, create a sense of urgency, or remind them of what they are missing—your email strategy should double down on this front. Your copy shouldn’t be a plain vanilla ad plastered as a marketing email. It has to create a sense of wow, carry an emotion that makes customers feel special, and make them rethink their departure from your brand.

Do it in style, and you can also use the opportunity to include humor in your email. Here’s an example:

4. Social Media and messaging channels

Social Media campaigns are one of the best ways to address your customer complaints. You can stay engaged with churned users via the content you create by posting your blogs, videos, and other relevant content – where the educational value you offer keeps them engaged even when they churn.

Like retargeting, social media ads are also a great way to hyper-target and communicate with your customers – both new and churned. It offers you a platform to creatively engage with your customers. These are a few formats of ads that you can experiment with.

  • Photo ads

  • Carousel ads

  • Video ads

  • Story ads and

  • Collection ads

  • Instagram ad

You can run these ads on different social platforms, including Facebook, Instagram, and Twitter. These ads will let you be where your customers are and bring them back to your business. These are also extremely helpful in reducing cart abandonment.

Messaging channels are the next big thing to communicate with your customers directly. Whatsapp is the most used messaging app with 2M active users, followed by Facebook Messenger with 1.3M users. You can integrate your live chat with messaging channels like Facebook Messenger and WhatsApp to send messages to your customers on their preferred communication channel.

Restore relationships and win customers for life

Losing customers is in many ways losing their trust. Therefore, your business must take measures to prevent this from happening. Create brand stickiness to retain your customers and improve brand loyalty to avoid customers from calling it quits.

But if you still see customers regressing from your brand, it’s time for your business to introspect on the reasons for this departure and find ways to restore their faith in your brand. Use the strategies mentioned above and keep innovating new strategies that work for you to regain their trust in your business. Monitor and optimize your re-engagement campaigns for a better impact on lost customers.


This story originally appeared in the Freshchat blog in April 2019.

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