Lessons Learned from Lost Customers
Losing a client is an inevitable event in your sales career. When it happens, you may experience a lot of unpleasant emotions. But there’s no time for wallowing in self-doubt. You need to focus on getting that customer back, and holding on to the ones you have. The following are a few selling reminders:
Have a conversation
Compose yourself and be prepared to accept criticism, then pick up the phone and call your lost client. Ask if there was something specific that caused the departure, and ask about any expectations that weren’t met. If you suspect the client didn’t like working with you, ask if having a different account manager would have made a difference.
Try to get permission to follow up in the future. Whatever the outcome of your chat, put it in writing and email it to the ex-client immediately. If you’ve been having too many of these “Where did we go wrong?” conversations, it may be time to take a look at improving your customer retention strategy.
Foster good relationships
Author Babette Ten Haken, in a blog for Salesgravy.com, proposes that building customer loyalty should be part of an overall sales strategy. She wrote, “Loyal customers make wonderful referral sources. They don’t tend to refer sales folks who only show up once a year, when it’s time to sign next year’s contract.”
That’s an important point to remember. Don’t focus so intently on getting new clients that you ignore the needs of existing clients. Automating your CRM can help you maintain good relationships with your clients throughout the sales process, so when renewal time comes, clients are more likely to sign a new contract.
Understand customer value
If you’ve been tracking customer interactions all along, then you should have all the information you need to determine a customer’s lifetime value. Here’s a simple formula:
(Average Value of a Sale) x (Number of Repeat Transactions) x (Average Retention Time in Months or Years for a Typical Customer) = Total Revenue
What you may find is a bump in retention time of even a month or two could have a big impact on your overall profits. Like many aspects of sales, customer retention is much easier to manage when you automate tasks and follow a schedule.
Read more about that in our white paper, “How to Standardize Your Sales Process.”