And we have new services, such as one-gigabit internet speeds and home automation and security systems, that give lost customers a reason to take a second look. We can now do personalized marketing at scale-customizing the message, the offer, the pricing. There’s more sophistication in the analytics we’re doing around individual customers and what their experience was with us the first time around. How have your win-back strategies changed? HBR recently spoke with Mark Greatrex, Cox’s chief marketing and sales officer, about the company’s evolving efforts to woo back defectors. cable provider, plays in a high-churn industry where win-back strategies are vital. “There’s an Art and a Science to This”Ĭox Communications, the third-largest U.S.
But few are investigating which customers would be most valuable to win back-the issue addressed by the following questions.
Kumar visited telecom companies around the world to explore their win-back strategies and found that many are experimenting with “propensity models” like this one. Reasons for leaving are also predictive: Customers who canceled because of price are more likely to come back than those who left because of poor service, and people who cited both reasons for quitting are the least likely of all to return. The researchers found that customers who have referred others, who have never complained, or who have had complaints that were satisfactorily resolved are the best bets. Many companies try to regain every lost customer, but this can sap marketing dollars firms will be more efficient if they focus on people whose prior behavior suggests a predisposition to return. How likely is a given customer to come back? As they parsed the data, they sought to answer four questions. To help focus the firm’s ongoing efforts to win such people back, they examined how each lost customer behaved before canceling, why each canceled (many companies ask departing customers this question), how each responded to various win-back offers, and how profitable each one who signed on again subsequently became. Kumar and two colleagues studied data on more than 53,000 customers who left a telecom company over a seven-year period.
40 MINUTE TO WIN IT PDF MOVIE
$20 off for 6 months, plus a $35 movie channel free for 3 monthsĬustomers who left over price get the discount customers who left over service get the upgrade.įrom “Winning Back Lost Customers,” March 2016 Pitching the Right OfferĪ telecom firm tested four win-back offers with 40,000 customers, looking not only at which offer lured back the most people but also at which was the most profitable. Third and most important, recent technology, particularly more-sophisticated customer databases, allows companies to draw on information about how people used their service the first time around to craft more-successful win-back offers and to identify and go after the most profitable defectors. Second, they are familiar with the company, eliminating the need to create brand awareness and educate them about the offering and thus reducing the cost of marketing to them. First, these people have demonstrated a need for the service, making them far better prospects than random names on a cold-call list. Kumar, a marketing professor at Georgia State University who studies “win back” strategies, cites three reasons companies should focus more energy on lapsed customers. New research shows that they might be better served by smart strategies aimed at getting lost customers to come back to the fold. (Other businesses plagued by churn include insurance companies, gyms, and online streaming services.) Companies with high churn typically spend vast sums on marketing to try to replace all those defectors. For any service company that bills on a recurring basis, a key variable is the rate of churn: How many customers cancel? In many competitive industries, churn can be substantial-some wireless carriers, for instance, lose 3% of subscribers each month.
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