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It’s already March end, and with the closing of the financial year many poor souls, who’s KRA’s, include winning new businesses must be struggling to meet the annual targets committed at the beginning of the year. There will be many lucky ones as well who would have already achieved their targets and may be already planning their vacations to celebrate their achievements.
Winning new business is like a lifeline for any service company and so is true for PR consultancies, but what about the business we lose every year? On an average any consultancy looses at least 20-30% of their clients for various reasons. This means in every 3-4 years you and your consultancy in all probability must have lost the same number of clients, you must be currently servicing, that is if your consultancy is on a healthy growth curve. For emerging consultancies the churn rate would be much higher.
While we invest all our energies in getting new businesses, won’t it be prudent to win back lost clients and bring them back to the fold?
In an article recently published by Harvard Business Review, citied three reasons why services companies should focus more energy on lapsed customers. First, these people have demonstrated a need for the service, making them far better prospects than random names on a cold-call list. Second, they are familiar with the company, eliminating the need to create brand awareness and educating them about the offering and thus reducing the cost of marketing to them. Third and most important, recent technology, particularly more-sophisticated customer databases, allow companies to draw on information/insights about how clients used their services the first time around to craft more-successful win-back strategies and to identify and go after the most profitable defectors.
Researchers have found that customers who have referred others; who have never complained, or who have had complaints that were satisfactorily resolved are the best bets. Clients who leave because of price are more likely to come back than those who left because of poor service; and clients who cite both reasons for discontinuing are the least likely of all to return. Having said that, there is little point in wooing back someone who will depart again in few months later, so it might be ’useful to predict how long a returnee will stay on board.
The research shows that clients who have bolted once stayed longer, and clients who defected because of price, stayed the longest of all. Many companies have a lot to learn about bringing back lost clients. Simply identifying those who are the most likely to sign up again, rather than appealing to every defector, can increase win-back rates eightfold.
Most PR firms, not only in India but even in developed markets pay least attention towards winning back lost clients. It’s like ignoring the treasure lying in your backyard. All that a consultancy has to do is to identify one smart individual who will dig into the records, reports or even consult the servicing teams to understand the reasons for losing clients. Identify those who can be potentially won back and work out a targeted strategy keeping in mind current business reality of the prospective client and approach the client with renewed offerings. I am sure many would find success in this approach, even if not immediately atleast a relationship will be re-established and can become a prospect for future.
Would be happy to know your thoughts on the above, please share them in the comments section of this article.
