Considerable sales and profits potential are snoozing in your former database of customers. Read about how you can identify profitable customers, analyse their reasons for leaving, and recapture them for your customer database.
Why is customer winback so important in B2B?
The frequently low number of potential customers as well as a high purchasing volume per order makes the loss of any single one customer particularly painful for B2B companies.
And yet customer winback in marketing and sales is often unpopular, as it is associated with an uncomfortable and degrading feeling. After all, these customers have chosen to turn their back on the company for a reason: they were perhaps unhappy with the products' quality, with the service or price. As is the nature of the beast, former customers are not as neutral towards the company as new customers, who have not yet had any experience with the company. This is why many marketers often invest more energy into winning new customers, with mediocre promises of success, than in recapturing a highly profitable existing customer for the company who has fell through the gap.
But this is a mistake, as the survey Customer Winback in the Business-to-Business Context from Mannheim University’s Institute for Market-Oriented Management shows. The chances of recapturing a lost customer is between 20 and 40 percent, while the chances of winning over a new customer is only about 5 to 20 percent. And despite the frequently low competition in the B2B segment, compared to the B2C segment, more than two-thirds of business customers are considered to be on the brink of leaving.
This shows that for B2B sellers, it is extremely important to establish a customer winback process in the company.
Preparatory measures for customer winback
Not all lost customers are worthy of attempting to reactivate them. For instance, some are not especially profitable, and others are perhaps not even possible to win back because the relationship is completely broken. As a result, companies must identify the lost customers, categorise them and analyse the possible reasons for their leaving – all before the company is able to launch measures for recapturing them. A database with well-maintained customer data serves this purpose perfectly.
Identifying customers based on the scoring method
To identify customers to be reactivated, the scoring method helps. In a graphical illustration, the attractiveness of the customer from an entrepreneurial point of view is compared to the expected probability of recapturing the customer. Customers which are more attractive and with a higher probability should be intensively focused on with the aim to win them back.
Analysing reasons for leaving
If you would like to win back a lost customer, you should find out why they have left the company. In addition to prices that are too high, many other reasons for lost customers are possible: poor communication, lack of quality or even a chain of unfortunate circumstances which were decisive for leaving the company. It is also important to precisely analyse the reasons for leaving in order to have a starting point for possibly recapturing the customer.
According to a survey conducted by Pitney Bowes in the B2B industry, the main reasons for switching sellers are:
- Poor customer service and a faulty delivery of products/services
- Inadequate communication - from asking about customer needs to product updates and maintaining contact
5 tips for customer winback in B2B
1. React as quickly as possible. B2B sellers should already have customer winback measures in place when the customer reduces contact; in other words, before the relationship is completely broken. As soon as the end seems near, or you have noticed the customer hasn’t ordered anything in a while, this is when you should take action. Because if the customer has already signed up with a new supplier, the chances of reactivation are much lower. Even if it doesn’t seem so at first glance: many customers are still willing to talk even immediately after jumping ship.
2. Keep in touch on a casual basis even if a former customer has already found another provider. Automatically send them news about your company. However, pay attention to having legally compliant communication – the recipient must explicitly agree to receive emails and other forms of contact.
3. Never go to external service providers for customer winback; instead, rely solely on your own employees' communication. The respective sales employee or key account manager should be the main contact person.
4. Encourage your sales team to communicate with each other. An analysis of lost customers showed that a lack of communication was decisive when it came to ending a customer relationship. Therefore, a sales team that communicates internally can have a positive impact on successfully winning back B2B customers.
5. B2B companies do not necessarily have to make many concessions at product or price level to successfully win back customers. As the customer winback survey mentioned above shows, integrating the customer into the process of finding a solution, as well as the transparency of this process, is highly important.