Reigniting Your Relationship with Your Inactive Customers – Tips from “America’s #1 Marketing Wizard”

Reigniting Your Relationship with Your Inactive Customers – Tips from “America’s #1 Marketing Wizard”

You win some and you lose some.

For many business owners, this is the attitude when they lose their customers and clients. One, two or ten customers jumping ship won’t make a dent on your bottom line, right? After all, you can’t please everybody, correct?

No. You’re wrong.

Entrepreneurs who have this kind of mindset are setting themselves up for failure.

Customer attrition should never be taken this lightly. While this should be already factored in your business plan, no entrepreneur or business owner has the license to have a lax or nonchalant attitude when it comes to losing customers. 0% customer attrition might sound a Herculean even impossible feat, but this should be the target of any business owner nonetheless.

The Cost of Losing a Customer

Karl Stark and Bill Stewart, the two experts at the helm of a Chicago-based marketing advisory firm, found out that while existing customers demand for price discounts, new customers demand for more. They revealed that a 3-year old client can bring businesses two or three times more margin versus a newly acquired customer.

This means that when you lose a client, you have to acquire approximately 1.2 new customers, offering 20% off on your products or services. At the same time, you have to find two to three new clients for every customer you lose to make up for the lost margin.

Clearly, having to win some, lose some mindset when it comes to customer retention can make you bleed money and eventually bring you down to bankruptcy.

Winning Back the Hearts of Former Clients

The thing is, when you lose a customer or a client, it doesn’t mean that they don’t want to do business with you for all of eternity. This is what this discussion will revolve around. In the next few minutes, you will learn how to win back your former clients and customers based on the teachings on “America’s Number One Marketing Wizard” – Jay Abraham.

For those of you who don’t know the great Mr. Abraham, he is a marketer extraordinaire with more than 25 years of experience and has worked with more than 10,000 companies from 400 industries. He was once recognized by Forbes Magazine as one of the preeminent executive coaches in the US for his uncanny ability to transform “corporate under performers into marketing and sales whizzes”.

In one Jay Abraham’s published works, he asked business owners a simple, yet very fundamental question –

Why in the world would you possibly want to go to the outside market and spend a lot of time, effort and money trying to attract, generate, convert and establish new customer or clients… until you have first focused a fraction of the effort, a tiny fraction of the time, and a millimeter of the expense trying to preserve and regenerate old, inactive customers?

It has already been established above how new customer acquisition is significantly costlier than tapping into your current customer base – whether they are active or not. From this question, Jay Abraham gives his expert recommendations on how you can woo what he calls your “reactive old clients” back into doing business with you.

The Cause of the Breakup

Just like a romantic relationship, customers stop doing business with companies because of two primary and very basic reasons.

First is the classic “It’s me, not you” scenario. This happens when a disruption or change happens in one or more aspect of your customers’ lives. This can be relocating to a place where you’re not present, they got sick so they can’t use your products anymore or they lost their high paying job that they can’t afford your offerings. Essentially anything and everything beyond your control falls under this reason.

Second is when you – intentionally or unintentionally – dissatisfied or offended your customers or under delivered on your promises to your clients. This can be due to bad customer service, defective products delayed shipping, etc.

When you know that something you’ve done caused your otherwise loyal customers to cheat on you with another brand or company, you have the responsibility to do all you can to win them back.

An Obligation of the “Highest Magnitude” to Set Things Straight

Businesses cannot afford to have bad breakups with their customers. According to Jay Abraham, when a customer expresses his or her intention to cut ties with your brand or has already done so, you as an entrepreneur have a responsibility to communicate with them, change their minds, regain their trust, show how much you care and how much you value them.

Your obligation of the “highest magnitude” is to make everything right.

You might ask – “Do I really need to extend myself and take extraordinary measures to patch things up with my disgruntled customers especially because there’s no assurance that I’m going to get them back?”

According to Jay Abraham, the answer is a resounding yes! He further explained that even though you’re not going to earn a penny from them, you have to demonstrate that you’re going to do everything in your capacity to make things right and that the last transaction they’ll have with you will be a positive one – regardless of the huge possibility that they will never come back.

While there’s a high probability that a few of your unsatisfied customers will never give you a second chance, Jay Abraham is positive that you will recover tons of lost clients.

The First Step is Introspection

You will never recover lost clients or customers if you don’t know the data. It’s not enough to say “we lose a few per month” or a “small percentage per year.” You have to be number obsessed when it comes to your customer attrition for you to be able to analyze and recognize what needs fixing.

Jay Abraham cites the example of businesses that lose as much as 75% of their clienteles on an annual basis? The reason that you need to know this is because customer attrition directly impacts your earning as demonstrated in the first section of this discussion. It’s really basic math – if you can reduce your customer attrition by 20%, you also increase your bottom line by 20%.

This is why many businesses are missing out on the opportunity to earn thousands of dollars more just by growing their business organically which means tapping into your active and inactive customer base.

After you've analyzed the number, you have to generate a list of all the customers who walked away from you.

Then grab your phone or sit in front of your computer because you’re about to…

Restore Contact

The next step in the Jay Abraham methodology to regaining lost customers and clients is to “deliberately” and “earnestly” reestablish contact.

Send them an email or call them and ask why they stopped patronizing your products or services?

Were they disrespected by one of your sales executives? Were they not given the reasonable discount they were asking for? Did they have an unpleasant experience with one of your reps over the phone?

The first step to healing your customers’ wound is to know what caused it and if their reason for walking away is something from your side of the fence, do whatever it takes – as long as it is reasonable  and within your means – to “reactivate your inactive customers.”

Keep in mind that your peace offering should be tangible, specific and meaningful. Offer free shipping for a certain number of transactions. Give them free products or access to exclusive services. Appease them with great discounts.

If they stopped doing business with your company and you’re at fault, speaking to these disgruntled customers and clients can be an opportunity for you to do a bit of market research.

Jay Abraham points out that knowing what disappointed your inactive customers will help you understand what for them are critical concerns vis-à-vis what you think are important. It will also help you identify accountability – or lack thereof – in your day-to-day operations, especially among those whose responsibilities directly impact your customers’ overall experience with your brand.

Essentially, restoring contact with your inactive customers can help you avoid repeating the same mistakes over and over again.

50% of Your Inactive Customers Left You for No Good Reason

Surprised? Based on Jay Abraham’s experience, half inactive customers leave for no good reason at all. Most of the time, something happens that pushes them off the wagon and they just simply get off the habit of doing business with you.

On the other hand, there are those who are just waiting for someone from your end to get in touch with them and see what’s going on. In Jay Abraham’s words, there are those “who wants the gratification of being asked to return to your fold.”

You’ll be surprised to learn that while these customers became inactive, they haven’t exactly abandoned you. So, don’t you dare abandon them. Jay Abraham couldn’t have said it any better as he makes this plea to every business owner out there –

“I submit to you that you have an obligation to help old customers, rehabilitate, rejuvenate, and return to their relationship with you, because they really want to. You have to have them want to.”

Winning Back Your Customers is a Win-Win Situation

Jay Abraham often talks about the importance for businesses to empower their customers through your offerings.

Equally acclaimed marketing guru Eben Pagan touches on the same thing when he said that not putting your offerings out there in front of the people who can benefit from them is one of the highest forms of disservice you can do as an entrepreneur.

Following this rationale, if you don’t exhaust all means to reconnect with your customers, you are doing them a disservice because you’re not allowing them to re-enjoy the benefits that they were previously reaping when they were still doing business with your brand.

As Jay Abraham pointed out, reestablishing your relationship with your inactive customers is clearly an advantage for them because you’re allowing them to regain the benefits they were getting when they were still doing business with you.

However, it’s also important to see that it’s advantageous for you as well because you will not only gain a customer, you’ve also regained a “friend” and a potential advocate and ambassador for your brand.

Everything to Gain and Nothing to Lose

One of the main obstacles why a lot of businesses miss out on the opportunity to make significant profits by reengaging inactive customers is the misconception that customers burn bridges.

Well, this can be true for a select few whose experience with your business is terrible to the highest degree. However, as mentioned in the previous section, majority of your dormant clients are just waiting for their feelings or sentiments to be acknowledged or for them to be recognized or for you to simply recognize them as valuable assets in your business.

Jay Abraham makes a logical point when he mentions that you have everything to gain and nothing to lose by asking your sales rep, your customer service associates or your customer retention specialists to get in touch with your inactive customers.

Seriously? What’s the worst thing that could happen? That someone would hang up the phone on you? Are you afraid that you will get a nasty reply?

If you’re fazed by these types of things, then the business arena – where people do get irate – has no place for you.

With the right offers couple with authentic sincerity, Jay Abraham guarantees that you will be successful in rekindling your inactive customers’ love for your brand and your business.

Prevention is Better than Cure – How to Avoid or Minimize Customer Attrition

Given that the products and services that you’re offering are well made and carefully thought of, why would your customers turn their backs away from you?

Throughout Jay Abraham’s career, he traced customer attrition back to the Big C of doing business – Communication.

Again, Jay Abraham points out that the way you should deal with your customers should be the same as to how you would take care of your private relationships or friendships. You have to “listen, really hear, and be continuously connected to your clients throughout the process.” According to Jay Abraham this is…

Easy to do if you love your customers

Expected from you if you really care about them and looking out for their best interest

A natural thing that you would give to any significant friend you have

And in the competitive world of business, your customers are your most important friends.

This is reinforces why you need to have a solid email marketing strategy or email newsletter strategy in place.

And when it comes to communicating with your customers, remember that it’s not about you. It’s about them. The best form of business-to-client communications should be able to educate your customers. It should keep them up to date with the recent developments and how it relates to their overall experience when doing business with you. It should present them with new opportunities.

When dealing with inactive customers, make a special offer for them or what Jay Abraham calls a “special time-dated private offer.” Based on Jay Abraham’s experience, offering inactive customers with exclusive offers will generate produce great “win-back” sales for you in a short period of time.

Make Sure You Have Their Correct Contact Information

You’ll be surprised how many of your clients and customers may appear to be inactive just because your offers are not reaching them. Why? Because you have an inactive email address.

At any given year, the email address churn rate is somewhere between 20% and 30%. So, you’re customers may not necessarily be inactive, but their emails are creating a huge disconnect between them and your business.

If possible, get more than contact information so you have more channels to reach them when they go inactive to rekindle the relationship. If you have several customer touch points (i.e. a contact center, after sales service centers, online customer portals, etc.), it is important that all of them provides your customers the opportunity to update their contact info.

Customer Reactivation Success Stories

To inspire you to create a customer reactivation strategy or have a win-back approach going, Jay Abraham shares some notable success stories that his clients were able to achieve, simply by reconnecting with their dormant clients:

A dentist was able to bring in three to give additional patients every week just by sending out reactivation emails to his inactive customers

A kitchen accessories manufacturer sent out a summer special offer to his inactive customers. The email blast was coupled with telemarketing. This gave him a 5% yield. Also, he found out that the highest response rate came from clients that have been dormant for two long years! This simple win-back campaign reactivated close to 100 inactive customers.

An interior designer sent out an exclusive pre-holiday sales letter to her inactive clients. The response rate came in at 10% giving her $14,500 in windfall profits.

A professional comedian mailed 1,542 letters to his former clients at a cost of $1 per mail. As of the publishing of Jay Abraham’s report, he has managed to get 16 bookings from his inactive client list or earnings amounting to $5,952.

A school furniture supplier emailed his inactive clients to update them about a new product – a menu display that incorporates nutrition education features. As of the publishing of Jay Abraham’s report, he was able to generate $10,200 in additional income.

Customers Are Not Lost Until You Stop Chasing Them

Have you ever watched one of those romantic flicks when the guy chases the girl he really loves even after he screwed up big time?

You have to be that guy. You have to chase after your inactive customers regardless whether the fallout was due to a scenario that you can control or not. When it comes to reactivating your dormant clients, you have to be indefatigable.

This is one of the reasons why Jay Abraham has constantly emphasized on the importance of falling in love with your customers. So that when they walk away, you’ll be motivated and passionate enough to chase after them.

Go get them back!

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Oleg Posternatsky is the Founder of Japkin. He's a bit of a perfectionist. Hates leaving work unfinished. Writes about marketing strategies, conversion centered design and landing page optimization.