You lost a customer to a competitor. It happens. But now that customer is back and wants to work with you again. While that's almost certainly a positive development, there may be caveats to consider, among them, why your customer left your competitor. You should also consider whether and how you can make things work better this time around.
Why Did the Customer Leave?
Ideally you have previous feedback from the customer that indicates why he or she jumped ship from your company in favor of the competition. This information is valuable because it provides insight into whether you can or are willing to make the changes necessary to prevent the customer from leaving again. Lacking this information, try to determine why your former customer is leaving the competition to use your company’s products and services again. The list below represents a selection of possible motivations for return customers, some good, some questionable and others downright unfavorable.
- Price: Either the competitor’s prices were not substantially cheaper than yours after all or they raised their prices
- Value: The customer discovered that the truism “you get what you pay for” is true, and works in favor of your company’s goods or services
- Customer service: The competitor’s customer service wasn’t up to par with the customer’s demands (whether reasonable or unreasonable)
- Availability: The competitor discontinued offering a particular product or service that your company recently added
Do You (Really) Want the Customer Back?
Determining why your customer left in the first place frequently bears significant weight on whether resuming a business relationship is actually a good idea. While your first instinct may be to think “of course!” sometimes “no” is a more suitable position.
For instance, a customer who is always chasing the cheapest price may very well jump ship again. After all, there is almost always another company out there willing to charge lower prices. Unless you’re willing to engage in a price war to undercut anyone and everyone, it might make sense to advise the customer that your pricing hasn’t changed and isn’t likely to decrease.
Likewise, encouraging the return of an overly demanding customer might not be advisable, unless he or she is prepared to drive a significant amount of work your way – and perhaps not even then. Attempting to satisfy continuous demands for extra services or products (without additional compensation) eventually translates to a drain to your company’s bottom line. Tolerating rude treatment is a guaranteed recipe for demoralizing your company’s staff.
On the other hand, your return customer may state that your company’s products or services represent superior value for money, or that the superior customer service you provide is worth paying more than rock bottom dollars. This is definitely a positive development. Under circumstances such as this, your main challenge is to ensure that the customer doesn’t regret the decision to do business with you again.
Retaining Your New-Old Customer
Whether your customer has returned because of a competitor’s real or perceived shortcomings or because of your company’s real or perceived superior products or services, you may very well be on trial, at least for the short run. Determine whether it is worthwhile for you to go the extra mile to keep your new-old customer happy.
Perhaps you’ve engaged in an active campaign to win back one or more customers through advertising or direct appeals. This might be the case with a situation where your company dropped the ball. Or perhaps you’re significantly revamped your product line or service terms to be more responsive. Under such circumstances, it is especially important to maintain the level of quality in products and/or services that motivated your customers to return.
Keeping the lines of communication open is essential, especially if poor customer service was a factor in driving your customer away originally. Encourage your return customer to provide feedback, both positive and negative – and be prepared to respond proactively.
It’s Just Good Business
You may have noticed that many of the strategies for retaining a returning customer are similar or identical to those for retaining present customers. That’s because, with exceptions for customers who have impractical (or impossible) expectations, returning customers are much like any other customers. They are seeking the best possible products and services for their money. If you provide what they’re looking for, return customers may very well stay for good.