Passing on some win-back wisdom
By Ryan Thompson, Creative Services Manager
Now and then, we’ll have clients ask us to help them with customer retention or win-back campaigns. These are great ideas as it’s almost always easier (and less expensive) to keep current customers compared to gaining new ones. I ran across a great article in last month’s Harvard Business Review with some really useful information regarding telecom customer win-back campaigns.
Details and highlights of the study are below, but the golden nugget of information is this: it’s crucial to carefully track the relationship you have with each of your customers. This data can be invaluable if you ever need to woo them back to your company.
About the article
The article discusses highlights from a study authored by V. Kumar, who is a marketing professor at Georgia State University. He looked at data from 53,000 customers who left a large telecom company over a seven year period. Based on the results of the study, there are three key reasons that “former” customers are better than those who are brand-new.
• They have a demonstrated need for the service your company is providing.
• They are already familiar with your company.
• You should have the data you need to determine which are the best customers to “win-back.”
How data can help
Whether your company is large or small, trying to go after all customers that stop taking your service isn’t practical or affordable. Fortunately, Kumar’s study provided some useful guidance on who to target with a win-back campaign.
• Customers who left based on price alone were more likely to return than those whose sole complaint was the service they received.
• Customers without a history of complaints or who referred other customers in the past are the best bets.
• Customers with complaints regarding both pricing AND service are the least likely to be swayed by win-back campaigns.
All of this information can be tracked within Customer Master’s CRM Module or by using Service Order Questions and Answers. Once the data is within Customer Master, it’s easy to run reports to identify accounts that fit the profiles outlined above.
How to win them back
Once you’ve identified the most likely former customers to approach, you’ll need an incentive. Deciding on what to use as “bait” can be a real challenge, but Kumar’s study can help with this aspect of the campaign as well. During the study, he also looked the company’s win-back efforts targeted towards 40,000 customers. The company offered four types of incentives:
• Discounted service for six months
• A free movie channel for three months
• A bundled offer that combines both of the first two incentives
• A tailored offer (Those who left over price got a discount. Customers who left over the service were offered a free movie channel.)
The study found the bundled offer was the most successful in terms of getting customers to return. However, the free movie channel was actually the most profitable as its cost to the company was lower. The key point is to try different offers on customers who have left your company to see what works the best in your situation.
If you’re thinking about a win-back campaign, or need start collecting data so you’re ready for one in the future, be sure to contact MACC’s Training Team. They can provide training customized for your company and help configure Customer Master so it collects all the data you need. Once you’re ready for a win-back campaign, MACC’s Creative Services Team can help develop all of the associated material your company will need.