In my last article, I talked about the importance of being able to anticipate lost customers as part of having a healthy growth strategy for your business. That included a case study that identified several loss triggers.
Now, using that same example, I’m going to share with you the action plan we developed to tackle those triggers.
The number-one thing to remember: know what’s in your control.
That’s what’s so empowering about loss triggers. While yours may be different from those that the case-study client was experiencing, each one you measure tells you something meaningful about the problem you’re working to solve.
After locking-in on your triggers take both preventive and contingent actions to put a cap on losses. To explain how, I’m going to broaden the scope and share must-do steps based on a number of additional case studies compiled here at Engage.
First, look at preventive actions: what you do to avoid losses from happening.
Pay attention to metrics—Create dashboards showing order rates, deployments, activities and your churn rate. I have a client in the resource sector who does this using a business-intelligence tool. It generates a 10% increase in productivity of each rep, because they know exactly who to call, when and for what reason.
Conduct engagement checkups regularly—Your engagement level with your customer defines the health of that business relationship: not previous sales performance. Your checkups should be done monthly with each client either with a series of emails and voicemail messages. After one client of mine put this in place, they their renewal rates rocketed from an industry last-place ranking of 65% to a top-place finish of 87%
Expand your contacts inside the account—Ensure your primary contact is not the only contact you have within an organization. Find their backup. Look for new contacts in other departments. As you do this, give them an incentive to connect with you by offering them special insider status. Show the customer how they gain privileged new connections with other customers, just by doing business with you.
Look for opportunities to deliver extra value—Are your clients using everything they bought from you? If there’s under-utilization occurring, you’re at risk of client defection. Find out why that’s happening and stem that loss by offering new features or new options designed to deliver extra value.
Involve them in a case study—You accomplish two important goals this way. Not only does it create more social proof in your marketplace to support the claims you make about how you deliver a product or service, this approach also gets your client involved in that undertaking. Those who evangelize for you are less likely to leave: they have a stake in your ongoing success.
Showcase their expertise—People appreciate it when their professional skills are recognized. It instils deep loyalty. Do a skills inventory of your clients list. Invite your best customers to participate on advisory or discussions panels.
Next, let’s examine what you need to do when losses happen despite best efforts. These are contingent actions.
Know your churn rate relative to growth—Every business I know has a rate of clients who leave and don’t come back. In some industries it’s high, and others it’s very small. What matters more is where your churn rate is pegged relative to your growth goal. It puts everything into perspective. I know a client that has a 5% churn rate annually but a 10% net growth goal. Provided they keep their prospecting pipeline full, and aim for 15% “gross” growth they remain well positioned to backfill every loss.
Offer incentives to stay. Too many companies only provide incentives for new customers: the best discounts and the most attention. It’s cheaper to retain a customer than to earn a new one. So consider extending some of your new-customer incentives to one who just left.
Go see them—Arrange for a meeting with a customer who has recently left. Make sure you bring a manager with you. Nothing helps more to save a lost customer than an in-person conversation with management. It shows you care about keeping them, even if efforts are last minute.
Ask the tough question—“What can we do to keep you as a customer?” Salespeople are averse to this tough question because they fear the customer will ask for the moon. In fact, most replies are reasonable. Treat as a separate matter whether you’re able to meet their request: you can’t fix what you can’t diagnose.
Summing up: while some losses are unavoidable, the more you’re able to anticipate lost customers, the better positioned you’ll be to stay on target to meet growth goals. Each of the must-do steps I’ve outlined ensures this is achievable for you in your business.