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December 5th, 2014

How to lose a customer the Good Way

The title of this article might seem a little odd, but, of course, that is on purpose.

The inevitability of customer churn

One must face facts in business; You WILL lose customers for one reason or the other. This is not a possibility or a high likelihood - it is an absolute. Whether you are selling bananas, socket wrenches, Internet access or rocket motors for the space shuttle, someone will come along to create and offer a better or faster or cheaper alternative that will entice your customer away.

With retail and one-off purchases, "losing a customer" is often something you will not realize, other than in the lowered sales figures. There's not a whole lot of uniqueness involved to deal with this, other than to, yourself, offer "better, faster, cheaper" as alternatives to attract them back.

It is with the service and repeat order businesses that this advice is the most useful. I have always found it more than a little mind-boggling when a customer of a service company (Internet, phone, cable, lawn care, etc) encounters negative resistance - and sometimes outright hostility - when trying to cancel their service.

Recognizing that a customer moving away is not always permanent

What many companies do not realize is that while they may be losing a customer NOW - they are not necessarily losing the customer FOREVER. If, however, you make the leaving process so negative, expensive and hostile, that temporary loss most definitely turns into a permanent one.

Let us back up for a second to the customer loss process; If you are, say, a cable company and a customer calls to cancel, there is absolutely nothing wrong with offering them incentives to stay and/or asking them what it was that you could have done better to avoid them leaving in the first place - in fact, this is not only expected, it is basic, good customer service. It is when this process turns into a protracted, defensive siege that turns what is already an unpleasant experience for the customer into an outright negative and potentially hostile one. Equally so - in fact, even worse - is when the company tries to nickel and dime the customer as a "punishment" for leaving: cancellation fees, restocking fees, depreciation fees, ad infinitum.

If you ask a customer why they are leaving or what you could have done to keep them and they reply with something along the lines of
"I just wish to cancel my service"
your ONLY reply should be
"I am really sorry to hear that, sir/madam, let us take care of this right away for you"
- and DO IT.

Ensuring your customers' last experience with you is not a negative one

If they have to return product to you, then ensure they do so and, unless the product is damaged - and ESPECIALLY if you already offer refurbished equipment to new customers, don't charge them restocking/refurbishing fees - it adds to the negative taste in the backs of their throats and increases the chances of them not only never coming back to you, but telling others not to go to you in the first place.

Some of you are reading this and thinking "That's all well and fine, Marc, but I've lost this customer and not only have I lost the revenue, but now I have expenses in getting equipment back, cancelling services with my upstream provider, etcetera, you don't know what it's like" - Here is the kicker you are not thinking about:

If you are running a good business; If you KNOW you are running a good business that is one of the better, if not best alternatives to your competition, THEY WILL BE BACK. But they will only be back if they know you will welcome them back.

One of the keys to customer service is about respecting your customers: This includes respecting the customers' choice to choose another service provider. If you know that you truly do provide a better service than the others, then you know a good percentage of your customers who leave will be returning.

Letting your customers know they will always be welcomed back

Here are some suggestions to let your customers know they will be welcomed back with open arms: (Using "Mr Smith" as our example customer)

  • "Mr Smith, again, we are very sorry to see you go. I would like to personally thank you for your years of business with us. I'd you to know that should you decide to come back to us, we will be happy to give you your first months' service free as a 'welcome back' gift."

  • "Mr Smith; You are cancelling halfway through your current term - I will pro-rate the rest of your month and credit your card/account just as soon as we have the modem/router/widget returned from you, with our sincere thanks"

  • "For your convenience, Mr Smith, I will also send you a billing summary of all of your transactions with us over the last year as a convenience for you tax filing, in case you might be able to write any of it off"

  • "Mr Smith, we really do hope to see you come back to us in the future, but no matter what you decide, we wish you all the best in your future endeavours; Thank you again for your years of loyal business!

Even if it feels like you are eating sand while saying such things to your departing customer, the goal is to let them know that they will absolutely be welcomed back with not only open arms, but with gratitude to your business fold - If they have the impression that you are going to nail them for every dime they have, they will go out of their way to find another competitor, rather than come back to you, if the company they are switching to does not work out.

So remember: If your customer is going to leave anyway, let them leave with as positive a feeling as you can: The likelihood of them coming back is all the greater than if you make them glad they left you in the first place.

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