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From the Little Stream Software blog

Once you start looking for customer defections and waning loyalty, you might find that you've been losing a lot more customers than you thought.

Often new customer acquisition overshadows customer retention so you don't realize there's a problem until you go looking for it. Fixing retention will help your profitability and can even make acquiring new customers easier.

You have two paths to handle defecting customers:

  1. try to win them back
  2. try to improve things to not lose other customers

To win customers back you'll probably need to reach into the incentives bag. Discounts, coupons, freebies, bonuses are all things that might entice a customer to come back. Often it can be useful to use multiple incentives too that escalate over-time (e.g. a discount-ladder).

The problem with trying to win back customers is most of them are long gone by the time you detect it.

A better and more long-term option is to try to address their problems so you don't lose other customers.

That might be simple things like improved customer support, product copy, or adding a new customer welcome campaign. It could be more difficult things like product quality problems, supplier outages, stockouts, or cutthroat competition.

To find those problems, you'll need to rely on your customer service data. What are customers complaining about? Why do they contact you? What can be improved?

Eric Davis

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