Retail TouchPoints: Re-Courting Customers for Winback Strategies Requires Right Access to Data

The core rule for driving winbacks is to treat customers with respect. Whether reaching them through direct mail, email or social networking, retailers should acknowledge their customers' current circumstances and present reasons (value and quality) for returning. Just dropping prices will not work. Customers need an emotional connection.

Max Goldberg, Founding Partner, The Radical Clarity Group

Some decent advice, but have we forgotten this is a retail site read by retailers? While it might be nice to have the ability to classify "valuable" clients from "not valuable" ones, most retailers do not have that luxury.

For market-specific retailers such as shoe stores, I would recommend they leverage their web site as a key marketing tool for keeping tabs on clients. Encourage clients to visit the site and opt in to a mailing list. Then regularly send out coupons, vouchers and special promotions through email.

It is then easy to track who comes in and who doesn’t through unique coding. Custom email programs can then be developed.

And of course, make sure their in-store experience is a great one.

Marc Gordon, President, Fourword Marketing

I like the "find out why they left" suggestion the best, because if you holistically fix those issues, you'll catch a lot more shoppers--like the ones about to decide to leave. I've preached a lot about understanding the why behind the buy, but it's just as critical to understand the why behind the goodbye! And to remember that for every one about to leave, there are probably five to ten that are starting to think about it.

The point in the article is dead-on: their decision to stop coming has nothing to do with simply forgetting about you. They got tired of dealing with something about you. Fix it, prove to them you've fixed it, and ask them to give you one more chance. Then, don't blow it when they give you that chance.

That's not as simple or as easy as it sounds.

Nikki Baird, Managing Partner, RSR Research

Speed is of the essence! Car dealerships are the world's worst on this scenario which could be applied to retail. Go in to buy a car, this is the money, deal, etc. The all-too-sure-of-himself sales guy stays smug and almost rude, then has the nerve to call you back three months later. By then, another car has been bought and put in the garage.

Also, incentive is a key. Send an apology with a 10% (or more) off your next purchase. At this point, all you can make me do is feel good and incent me to come back.

Susan Rider, President, Rider and Associates, LLC

It's all about consistency and not in a negative way. Customer loyalty must be earned over time and having the right data is essential for any winback strategy.

One thing I like to see is a margin consideration on any winback campaign. "Get the Best Ones Back First" has to be the primary objective. Create promos or value that build margin and basket. Offering a few loss leaders is not an effective way of building loyalty as these shoppers have no loyalty and are looking for loss leaders. Think margin...think margin....

Doron Levy, President, TheMortgageMachine.ca

There's a key rule missing from this list: Know who you *don't* want to win back.

During the long-distance price wars (remember those?) of the '80s and '90s, Sprint was able to dramatically improve its bottom line through the simple insight that a significant number of its customers had a net negative impact on its business. By letting many of those customers defect and by *not* trying to win them back, Sprint saved more than enough money to fund its entire CRM investment many times over. Fast forward to today, and Sprint is successfully repeating the strategy in its mobile business.

The same situation holds true in retail. In grocery, for example, the bottom 75% of customers often account for 25% or less of sales, and generate little or no profit. By actively cultivating your best customers, and by firing your worst, retailers can increase sales per customer and overall profits, even if total revenues dip somewhat.

The challenge is that you need both the data and the tools to make this type of analysis possible. Retailers have made great strides in collecting the data, but many lack the tools to make this type of data-driven decision making widespread.

Ben Sprecher, Founder and VP, Marketing, Incentive Targeting, Inc.

I believe the strategy for winning customers back is extremely challenging. First off, you're not just trying to win them back...you're trying to unglue them from another company or brand. How much of a grip has the competition got?

In order to develop tactics there has to be a fundamental understanding of the decision behavior and the motivating variables. Time can be of the essence...unless it's a long term and intermittent process, let's say, for durables. If your homework hasn't been done, you're starting from scratch and it can take months to figure out what you should have known all along.

Unfortunately, I'm seeing too much of the old business ways of "let's throw it on the wall and see what sticks." Just because the fees associated with the internet, social media, etc, seem to be low, doesn't mean the costs and missed opportunities can't be very costly indeed.

Joan Treistman, President, The Treistman Group LLC

It has been reasonably well documented, especially by Tim Gokey at McKinsey, that managing smaller changes in customer behavior (i.e., customer migration) is more impactful than managing outright retention and winback.

Understanding smaller changes in customer behavior that lead to churn and the ability to react to these changes (and preempt churn) also goes in tandem with the idea of understanding why customers ultimately defect. Most companies focus too much on winback without understanding the why behind the defection in the first place, much less working to pro-actively preempt churn.

Phil Rubin, CEO, rDialogue

Too many retailers don't have a customer strategy beyond "put the merch in the store, and heck, they'll come." Grocery retailers, for instance, who can gross thousands of dollars a year from a single customer, generally don't have an attrition policy. If you're a retailer, send me a note and ask for a copy of RightNow's customer scorecard to see how well you stack up.

Cathy Hotka, Principal, Cathy Hotka & Associates

The easiest customer to win back is the one you never lost. I think the most important point, which is inferred here but not explicitly stated, is that holding onto your customers is most important—-and can be less costly than trying to win them back once they've left. Jim Harold of Acxiom is spot-on; retailers need to segment their customers and they must identify customers to grow on. Rather than trying to cater to all customers, unprofitable and highly transactional customer relationships should be re-assessed during a downturn.

It all comes back to managing costs while trying to increase revenue, and there needs to be a highly targeted approach to expense management. If retailers start cutting costs across the board, they're going to lose customers, because service levels will take a hit. Whether we're talking about a big-box retailer or a high-end luxury chain, service leaders will have a head start in customer retention.

Mark Baum, Partner, MARCAT Group LLC

Remember the expression, "An ounce of prevention is worth a pound of cure?" It applies well here. It makes more sense to manage the entire customer service experience from the get go than to try to discover what went wrong. That means attending to every detail of the customer experience in every channel. But even the most customer-centric companies with the best service strategies experience attrition from time to time. Finding out why they left, fix it, and prove to them that it's fixed is the answer. How do you do that? Talk to your customers and act on what you hear!

Marge Laney, President, Alert Technologies, Inc.

Understanding your customer, and acknowledging your shortcomings are the vital rules. Efforts to win back a dissatisfied customer will only end in tears if you have not fixed the reason the customer left in the first place. Understand the reason, and maybe admit that your service is crap or your product is unreliable, then aim to fix or alter these reasons before going back to customers. A customer who has shopped with you in the past and left is worth fighting for; they are familiar with you and have left for a reason...find it.

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