Avionics News September 2016 - 45

cases, the customer is going to your friendly competitor who's
offering a better solution to their needs. Beyond the immediate
costs, this has a ripple effect; all the time and effort you've
spent in the past - and any referrals in the future - are thrown
away, according to Geoffrey James, author of Business Without
the Bullsh*t.
It makes sense, then, that you have some way to manage
lost-customer retention. Yet only about 30 percent of
businesses do, according to David Moth of social-media firm
Econsultancy, in spite of the fact that these are "more efficient"
leads to pursue because they're less costly to reacquire.
There are three reasons why you would want to woo these
folks back, according to V. Kumar, a marketing professor at
Georgia State University. They've already demonstrated a
need for service - so they're a better prospect than cold-calling
customers on your contact list - they're already familiar with
your company, so you don't need to create brand awareness,
and you already know their needs, equipment and preferences,
so you can craft a most successful win-back offer.
But not all defectors are likely to return, so it's in your best
business interest to know which to pursue and how to do it.
After all, you want these customers to come back and stay, not
simply leave again if they're still not satisfied.
Win-back combinations
Parsing the difference isn't easy. But as a concept, it stems
from the reasons these customers left and their receptiveness
to your efforts to get them back - including offers and special
bonuses.
By studying cellphone customers, Kumar looked at
the issues involved in customer win-back, including the
customer's experience the first time he or she worked with
a provider, the reason why the customer left the provider,
and the kind of offer the provider made to get the customer
to return. And how that offer affected the likelihood that the
customer would give the company another try, the length of
time they would stay, and the effect regaining the customer
had on the company's profits.
Based on his results, he suggests that, to capture the most
efficient defectors, companies should focus on those who
have shown some loyalty in the past. These include customers
who have referred others, those who haven't complained, and
those who, if they did complain, were satisfied with the makegood. At the same time, he found that customers who left for
price were more likely to return than those disgruntled by

service, and those who cited both reasons were least likely of
all to return.
Conversely, he found that a bundled win-back offer that
includes both a discount and a service upgrade - such as free
database updates or other bonus services in addition to special
pricing - to be the most effective in regaining lost customers,
compared with those offered only a price cut, only a service
discount, or an offer that was specifically tailored to the reason
they left. But he also examined which solution was the most
profitable for the company; while the service upgrade had the
lowest success rate, it had the highest return on investment,
whereas the bundled offer had the lowest ROI. In between are
those retained with price-cutting offers, which makes sense,
considering any rebate will affect the bottom line on top of any
free service.

DON'T CONSIDER A LOST CUSTOMER
TO BE LOST FOREVER, AND YOU CAN TAKE
STEPS TO REVERSE THEIR DECISION

IF YOU'RE WILLING TO TRY
TO WIN THEM BACK.
Still, he suggests, any savvy win-back initiative can be an
important strategy for service companies to use. While it may
hurt in the short term, you'd be wise to remember the benefits
that come later.
Plan of action
Getting there takes a plan that recognizes bringing back a
lost customer - and playing defense with those who are at-risk
for leaving. It requires learning why they left, pivoting your
customer service to turn problems into opportunities, and
staying on their radar so they reconsider the next time they
need an installation or service.
Yet those customers aren't leaving for nothing, and you
have to understand their rationale. Get the backstory from your
people. That might not indicate the real problem, but it will
alert you to any landmines that might be laid between you and
Continued on following page
avionics news

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september

2016

45



Table of Contents for the Digital Edition of Avionics News September 2016

No label
Avionics News September 2016 - Intro
Avionics News September 2016 - No label
Avionics News September 2016 - Cover2
Avionics News September 2016 - 1
Avionics News September 2016 - 2
Avionics News September 2016 - 3
Avionics News September 2016 - 4
Avionics News September 2016 - 5
Avionics News September 2016 - 6
Avionics News September 2016 - 7
Avionics News September 2016 - 8
Avionics News September 2016 - 9
Avionics News September 2016 - 10
Avionics News September 2016 - 11
Avionics News September 2016 - 12
Avionics News September 2016 - 13
Avionics News September 2016 - 14
Avionics News September 2016 - 15
Avionics News September 2016 - 16
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Avionics News September 2016 - 18
Avionics News September 2016 - 19
Avionics News September 2016 - 20
Avionics News September 2016 - 21
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Avionics News September 2016 - 24
Avionics News September 2016 - 25
Avionics News September 2016 - 26
Avionics News September 2016 - 27
Avionics News September 2016 - 28
Avionics News September 2016 - 29
Avionics News September 2016 - 30
Avionics News September 2016 - 31
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Avionics News September 2016 - 33
Avionics News September 2016 - 34
Avionics News September 2016 - 35
Avionics News September 2016 - 36
Avionics News September 2016 - 37
Avionics News September 2016 - 38
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Avionics News September 2016 - 40
Avionics News September 2016 - 41
Avionics News September 2016 - 42
Avionics News September 2016 - 43
Avionics News September 2016 - 44
Avionics News September 2016 - 45
Avionics News September 2016 - 46
Avionics News September 2016 - 47
Avionics News September 2016 - 48
Avionics News September 2016 - 49
Avionics News September 2016 - 50
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Avionics News September 2016 - 53
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Avionics News September 2016 - Cover3
Avionics News September 2016 - Cover4
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