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Rollio Feb 16, 2016 8:00:00 AM 3 min read

How to react to lost customers

How to React to Lost Customers


Customer churn can be devastating to your business. Despite this fact, however, you can still realize important value to your business from customers who are headed for a competitor. Here’s how:

Consider an Immediate Response

If an unhappy customer announces that they’re leaving, you may be able to take advantage of the service recovery paradox if you react quickly. This paradox states that reaching out to a disgruntled customer and offering them some special compensation for their inconvenience can sometimes result in winning them back with even stronger loyalty. For example, an unhappy hotel guest might be delighted to receive a credit good for a free night in any of the hotel chain’s locations. Research also shows that accompanying the recovery offer with an apology actually doubles the customer satisfaction levels.


Analyze the Reason for Churn

If your customer has definitely departed for a competitor, they still have something valuable to offer you: information. If you know (or can find out) why you lost this customer, you can make use of what you learn to change your policies and procedures. You can gain this information from a personal followup or a “we’re sorry to see you go” quick survey. Once you have this information, you can use it predict future drop offs. For businesses with larger customer volumes, sophisticated analytics are available to analyze which customers you are most likely to lose.


Use What You Have Learned

The unvarnished truths you learn from one lost customer may help you prevent the loss of dozens or hundreds more. It’s important to remember that customers prefer to be loyal: a study found that 85 percent of customers who switched companies stated that the brands they left could have kept their business. The majority of their complaints focused on straightforward areas: they felt that customer service was poor, that they didn’t receive what they expected or the information they received was contradictory. Analytic data can also be helpful in predicting which of your current customers are close to cutting loose from your company. If you target the high-value subgroup of these customers with unique premiums or discounts, you can optimize your ROI.

No company wants to see customers go away, but the ones you lose hold the key to understanding how to strengthen your present and future customer base.

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