Winback is Not a Retention Strategy
More and more companies are coming to Affinitas seeking help with similar challenges:
- “I’m losing customers faster than I’m adding them.”
- “My churn rate is nearly 100%.”
- “I need a winback solution – quick!”
Although Affinitas has built many successful winback solutions for a variety of companies serving multiple industries, even a successful winback approach may only be a band-aid on a wound that needs more serious attention. After all, a completely satisfied customer is less likely to leave you than a customer who feels that his or her needs haven’t been met. The key is to understand each customer’s needs, and to cultivate and communicate with customers during their lifecycle. Increased retention rates over the course of each customer lifecycle proactively reduce churn and minimize the frantic need for costly winback strategies and “save” promotions.
It’s All About Your Customer’s Experience
So many companies seem to say “We want to be the L.L. Bean of our industry.” It sounds nice around the boardroom table and it’s a worthwhile objective, but it’s just a futile fantasy without first understanding whether or not your company is delivering on its value proposition to its customers. And to further complicate the issue, professional marketers in most companies today are motivated and compensated based on the number of new customers that they add to the customer base rather than the number of customers that actually stick around and continue to purchase and drive revenue. The vicious cycle continues – companies bring on more and more customers, but don’t pay attention to them after they’ve become customers, thereby reducing customer satisfaction, thereby increasing churn, thereby increasing the need to bring in more customers and to eventually look for a winback solution that will stem the losses.
What’s Your Solution?
There’s not a singular solution that’s right for all companies and all industries. However, Affinitas has found that a two-step strategy can often get a company back on track:
First, build your safety net: Develop a tactic to help save the customers that are heading for the doors. It might be a special discount offer or a free gift, something that will keep them around long enough for a meaningful exchange of information that will shed light on the reasons for their dissatisfaction. This is a short-term approach to buy some time while you develop your retention strategy.
Second, build a bridge to your customers: Develop an understanding of the typical customer lifecycle – where and when are customers leaving? What is happening, or is not happening, at those critical times? Develop a relationship with your customers – conduct a satisfaction survey to give customers the opportunity to tell you where you’re not delivering. The results might be surprising. Be ready to address issues one-on-one and make some process changes. Develop a full scale plan to communicate with and nurture new customers from the very start of their lifecycle and for the duration of their tenure.
Retention begins the day after the sale is made.
Learn more about Affinitas’ proprietary Customer 1st retention program.