Have you ever had a customer leave you and just said to yourself, “Big deal, so what, and who cares? New customers are a dime a dozen.” Yeah, me, too – long ago. But let me tell you why we’re both wrong and why we should almost always work hard but be selective about keeping defecting customers.

First, it usually costs more to acquire a new customer than it does to recapture a departing one. Second, departing customers tell exponential numbers of friends why you stink, but those whom you tempt back into your fold tell even more people what a deal they conned you out of, most of whom will be new customers. Third, who needs a third reason? The first two are more than enough, but there are more discussed below.

But, how do you get defectors to rejoin your tribe? And how hard should you work and how much bling should you toss at them to get them back? Like most things common business owners take for granted, however, there is a good deal of science behind winning back lost customers.

Some folks who appear to know a lot about this stuff are V. Kumar, a professor at Georgia State University; Yashoda Bhagwat, a doctoral student there; and Xi (Alan) Zhang, another doctoral student there, who studied the issue for seven years and published an article in the Journal of Marketing in 2015, which got a lot of press including an article in the Harvard Business Journal. Regaining “Lost” Customers: The Predictive Power of First-Lifetime Behavior, the Reason for Defection, and the Nature of the Win-Back Offer. Journal of Marketing: July 2015, Vol. 79, No. 4, pp. 34-55, (http://journals.ama.org/doi/10.1509/jm.14.0107) discussed in the Harvard Business Journal, March 2016 pp. 22-23 (https://hbr.org/2016/03/winning-back-lost-customers).

The upshot of Kumar and Co’s research is reacquiring customers who leave may help businesses not only regain their lost profits but also usurp profits from competitors. Nonetheless, not all lost customers are worth the investment in reacquisition and not all of them will remain profitable if reacquired. These guys studied (1) the lost customers’ first-lifetime experiences and behaviors, (2) the reason for defection, and (3) the nature of the win-back offer made to lost customers are all related to the likelihood of their reacquisition, their second-lifetime duration, and their second-lifetime profitability per month. Their study shows that the stronger the first-lifetime relationship with the firm, the more likely a customer is to accept the win-back offer.

Come back tomorrow and find out some answers to vital questions you need to consider when crafting your own “customer saving strategy.”

[reminder]Do you even care about recooping your lost sheep and recouping their profits?[/reminder]