The probability of selling to an existing customer is 60 – 70% whereas the probability of selling to a new prospect is 5-20%. So, if customer retention or customer churn is a problem, your first priority should be focusing on your current customers and doing everything in your power to keep hold of them before turning your attention to potential customers.


Lost customers – a rich revenue stream

Once you have put a customer experience management programme in place, you can turn your attention to lost customers. Lost customers are often ignored, mainly because companies often believe they are permanently lost and do not want to waste valuable time trying to persuade them to come back.

However, the probability of selling to a lost customer is between 20% and 40% (nearly double the likelihood of trying to sell to somebody who has never done business with you before).

Understanding why customers defect

Defections take place for a number of reasons. It may be due to a competitor’s pro-activeness or a company’s neglect. It could be due to a perceived ‘attitude of indifference’ or poor service on behalf of the company. It may also, of course, be due to price; however, this usually has to be significant (more than 15%) to cause someone to change to a new supplier. All companies providing products and services to their customers on a regular supply basis need to understand these factors in order to build loyalty in their customers and thus to stabilise (and ultimately grow) sales.

Our approach

B2B International can use a lapsed customer survey and lost customer research to help you understand why customers switch from one supplier to another and the ‘triggers’ that cause these changes in behaviour.

We can also help your company understand what drives customers to a new supplier (whether it is opportunistic or rationally planned) as well as finding out who is instrumental in the decisions and what has caused the switch.

Questions we will answer for you

  • Understand how price and, in particular, your treatment of lost customers around price affects their propensity to leave
  • Understand what role the competition play in your customers choosing to leave and go elsewhere (pull vs push factors)
  • Understand how you could win back customers who have left
  • Understand which of your competitors lost customers are going to and why
  • Determine the role that channel plays in their decision to leave/switch
  • Measure whether the competition has thus far delivered on promises and expectations
  • Gain an understanding of whether a certain type of customer/segment is more likely to leave
  • Determine whether the reasons stated for leaving change over time

What this means for you

A certain amount of ‘churn’ is to be expected within any business. However, with a large customer base, just a 1% churn amounts to a significant cost. Through lost customer research, you can truly measure the Return on Investment (ROI) if you implement the Lost Customer Research Programme with B2B International.

For more information on what makes people switch and how to win the devotion of your customers read some of our shared experiences in the following white papers:

What Makes People Switch?

Loyalty – How To Win Devotion From Your Customers

Potential customers – building your customer base

All companies should look to have a customer loyalty programme as well as a lost customer programme in place. However, understanding the needs of potential customers is another important objective as well as establishing how your company compares to the competition. Armed with this knowledge, your company will be able to win new customers and build a larger, loyal customer base.

Our approach

B2B International can help you establish satisfaction levels amongst potential customers in terms of the products and services they receive from your competitors, allowing you to benchmark where you are doing well and areas you may need to improve. We can also help clarify awareness levels of your company with potential customers and understand the opportunities and barriers to using your products and services.

However, more importantly, we can help determine what could trigger potential customers to switch to doing business with your company and their likelihood of doing this in the future.

For more information on how competitor intelligence can help your company, read the following white paper:

Competitor Intelligence Research & Market Intelligence White Paper

Case study: Understanding why customers are defecting

Business challenge

Our client, a tool manufacturer and distributor with over 100 years heritage, had been losing up to 10% of their customer base each year for the last three years. They wanted to understand why customers had defected and to develop a plan that would ensure customers stay happy and loyal in the future.

What we did

We carried out two stages of the research. The first stage was qualitative, consisting of 20 depth interviews (45 minutes in length) with lapsed customers to get ‘beyond the superficial’ and really understand the triggers that had caused people to switch away from our client. These interviews helped us achieve the level of detail required for an accurate understanding of the market and enable us to develop the main questionnaire for stage two of the research. The second stage was a quantitative study speaking to 300 lapsed customers over the telephone to obtain insights and measures to help reduce customer churn and increase loyalty.

We not only ascertained the key issues as to why customers were leaving, we were also able to benchmark how well our client was meeting expectations against their competitors. Through detailed analysis we were able to show how a certain customer segment was more likely to leave and thus put resulting actions in place to make sure greater retention occurred with this customer group.

We developed an on-going, lapsed customer survey tracker to track the core metrics and create a feedback loop to our client so they were able to determine whether the reasons stated for leaving changed over time. Through this continued focus, we were able not only to help lessen defections but also to contribute to greater turnover and profits.