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How to Recover Lost Customers, by Nick Wreden,
author and CEO of FusionBrand.
Current research indicates that a satisfied customer
will tell five other people
about a pleasant brand experience.
But if that customer has a poor experience,
they'll tell eleven other people about it.
Despite this, 80% of most marketing budgets
are devoted to customer acquisition,
even though it costs 3-5 times more
to replace a customer than it does to keep one.
In one recent study, British Airways found
that recovered customers,
that is, customers who were once dissatisfied,
but have found resolution,
actually gave the airline more of their business.
Customer recovery occurs in three steps.
The first step consists
of both apology and accountability.
A brand that wants to recover a customer
must say, "I'm sorry," and take ownership of the mistake
even if it was because of a third party.
Next, work with a customer
to determine an appropriate remedy.
This gets the customer involved in the remedy,
and sometimes uncovers less costly solutions.
In one Citibank experiment,
specifying timeframes for next steps
increase the customer satisfaction 40%.
Finally, follow up.
Determine whether the customers
received the promised treatment,
and more importantly, how they feel about it.
One study indicated that a follow up call
to a once unhappy customer could boost satisfaction 5-7%.
To recap: 80% of most marketing budgets
are devoted to customer acquisition,
even though it costs 3-5 times more
to replace a customer than it does to keep one.
Customer recovery occurs in three steps:
Apologize and take accountability
for the remedy;
work with the customer to determine an appropriate remedy;
and follow up with the customer
to ensure the remedy has satisfied their needs.
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