Know Your Lost Customers – the Volume, Value and Reasons Why

Call it what you want – the revolving door theory or the leaky bucket approach. You must reconcile “Customers In” with “Customers Out” to know how well you are doing with managing customers as an asset of your company. This is just about math. (See 5 Answers Every CEO Should Want to Know.)

In addition to knowing the number of lost customers, you need to know the reasons why customers left so you can drive change across the business. Without this information, the organization misses a massive opportunity to galvanize people into taking action.

One potent approach to make the customer defection information come alive is to hold a monthly “customer loss review” meeting.

1. To prep for this meeting, compile the data on customer defections so that you know which customers left and why.

2. Assign executives to each make outbound calls to ten customers who have left during the month under review. They need to find out how and why the customer left. There’s nothing quite as compelling as a customer speaking to an executive who has accountability for making something happen. Customers are often so amazed by the effort that they consider trying the company again.

3. Shortly after the calls have been completed, convene a meeting to discuss what’s happening with your customers and what is driving them away. In that meeting get alignment on how to prioritize the issues and assign accountability.

4. Perform a “Customer Loss Review” each month.

5. Use subsequent loss review meetings to track progress on resolving issues, continuing the process with executives calling customers who defected.

Hour for hour, the return on investment for this loss review process is one of the best in terms of driving action.

The process of establishing a reliable discussion for identifying customer defection issues and having executives constantly involved in speaking to defecting customers gets people moving more rapidly than any twenty presentations I’ve seen on customer satisfaction statistics. It’s real-time information, it’s operational, it’s relevant, and it puts people’s skin in the game.