Lost Customer Research: 5 Business Benefits
Last week, I wrote a blog post on five facts your company should consider when determining whether or not a lost customer research project is a worthwhile investment of your resources. This week, I will share five business benefits of launching a lost customer research initiative.
- Improving your company’s understanding of its former customers will help it improve its customer targeting and knowledge of each customer segment’s needs so that it can enhance its customer retention levels. At the same time, learning about your former customers will also enhance your company’s understanding of its buyer and user personas.
- Learning about your lost customers will enhance your company’s knowledge of its competitive positioning in the marketplace by improving your understanding of your closest competitors and competitive advantages and disadvantages in the marketplace. Lost customers are in an ideal position to provide this information because they have intimate knowledge of your products and services and are unbiased as they will not be affected by corporate pricing, positioning, or product functionality changes. This is invaluable information for the management team to consider when developing and/or refining your company’s product and go-to-market strategies.
- Studying lost customer trends can help your company preemptively identify product, support, or pricing issues before they cause other customers to defect. Waiting too long to resolve these types of matters can often lead to mass-customer defection that can easily be prevented by knowing the driver behind the defection as soon as it becomes an apparent issue.
- Understanding why customer losses have occurred and which competitors these customers have been lost to provides valuable insights for managers to use in refining their company’s product development, product positioning, support, and go-to-market strategies.
- Identifying the root causes for customer losses provides companies with the information to evaluate whether or not those customers can be won back down the road and what it will take. This is valuable insight as you already know the lost customer’s potential value based on their previous billings records. This makes deciding whether or not to go after this lost customer a simple mathematical equation. Additionally, asking for lost customer feedback also demonstrates to the lost customer that their experience matters and insights are incorporated into corporate decision-making. In most instances, this demonstration will boost lost customer recapture rates, as customers want to know that their voice is being heard and factored into corporate decision-making.