The State of Customer Win-back:
The How's and Why's Behind This
Untapped Corporate Competency
By Jill Griffin, Griffin Group

My book, Customer Winback (co-authored with Michael Lowenstein) was based on this thesis:
To remain in business, every firm must successfully acquire, keep and grow customers. And if
a high value customer defects, the firm needs a proven process for winning the customer
back.
Surprisingly, most companies have little or no win-back capability. Why? Because the typical
firm considers the lost customer a lost cause when, in fact, winning back lost customers can
be a rich source of renewed revenue for any company.
Griffin Group's 1999 customer win-back survey, conducted as part of our win-back book research,
found the average firm doing little in the way of instigating win-back programs or managing customer
loss. Fast-forward to 2007, and the state of customer defection management in today's corporation.
Are firms now better equipped to recapture and leverage lost customers? This article will share
highlights from the Griffin Group/ CustomerSat "2007 Win-back and Loss Study" and examine the
troubled state of lost customer policies, programs and monitoring systems in corporations.
Customer Management's Seven Year Plague
'Bad and getting worse' is the current state of customer defection management inside most
firms. That's the over-arching finding from our 2007 survey of over 500 sales, marketing and
corporate buying executives performed in April, and conducted in cooperation with research firm
CustomerSat (www.customersat.com). Both business-to-business and business-to-consumer
executives were surveyed from a cross-section of industries including insurance, banking and other
financial services, manufacturing, electronics, technology, professional services, healthcare,
telecommunications and pharmaceuticals
What's driving these new, dismal findings? And why have firms, at best, stayed in neutral or, at
worst, regressed, in regard to improvements in customer defection and win-back management since
our previous study? Answer: Three key influences. Since 2000, three market trends, converged
together, have created a "seven-year-plague" of sorts regarding customer management: (1) the
mergers and acquisitions wave, (2) an increase of customer resellers and (3) the proliferation of
customer contact channels, have collectively left even more customers unattended to since the 1999
survey. But, the root of customer mismanagement goes even deeper. Disconnected customer
information silos and an emphasis on acquisition over retention have haunted corporations for years.So, it's understandable that our latest survey finds firms even less equipped today, than ever before,
to manage customer loss.
Comparative Findings: 2007 vs. 1999
· "Do you know how many customers you lose per year?"
Marketing executives in both surveys responded generally the same (44% (2007) vs. 48% (1999)) to
this question. Yet, a noted increase was reported among sales executives in the newest survey versus
the earlier (41% vs. 30%). (See Exhibit I.) Why the drop among sales executives? Any or all of the
"Seven Year Plague" influences noted above could be responsible. Bottom line, it is a sad testament
to the state of customer management that just under half of the respondents in both groups were
unaware of their annual customer losses.
Exhibit I


· "Does your company have a process for identifying customers at high risk of defection?"
Almost two-thirds (69%) of sales executives in both the 1999 and the 2007 surveys reported no
process for identifying high risk customers. (See Exhibit II.) Moreover, marketing executives
reported an increase in this deficiency versus the previous survey (65% vs. 56%). Clearly, firms have
made no gains in the provision of customer intelligence to flag customers highly vulnerable to
defection.
Exhibit II· "Do you have a process for determining which competitor got a customer you lost?"
Perhaps customer management erosion, since the previous survey, was most evident in this question.
The percentage of respondents reporting no process for determining which competitor got the lost
customer, more than doubled in both groups of executives versus the earlier survey. (See Exhibit
III.) For marketing executives surveyed in 2007, a whopping 66% reported no process compared to
30% in 1999. Likewise, for sales executives 53% reported no process, a huge increase versus the
20% reported in 1999. Nowhere in the survey results are the effects of the three trends noted earlier
(mergers and acquisitions, proliferation of contact channels, increase in customer resellers) more felt.
Bottom line, the growing complexities of customer management have created big intelligence gaps in
many firms.
Exhibit IIINew Query Learning
A number of new query areas regarding customer loss and win-back were added to the 2007 survey.
Learning highlights are as follows:
· Remedial win-back efforts are missing.
The majority of buyers reported their dismissed suppliers made no attempt to win them back. Only
25% reported the dismissed supplier offered an apology and only 14% of buyers said dismissed
suppliers adopted a keep-in-touch strategy with them. These two actions---making an apology and
staying in touch–are essential steps to recovering lost business. Yet, the data clearly shows that once
an account is lost, most fired firms do not pursue the win-back opportunity.
· Win-back strategies are more relevant than ever.
More than half of buyers surveyed (62% of respondents) who fired a key supplier reported choosing a
replacement supplier that offered basically the same product or service. This finding indicates that the
lost account's needs remain basically the same and, theoretically, could still be filled by the dismissed
supplier. This spells win-back opportunity, and makes the absence of win-back efforts from fired
suppliers (see previous bullet point) even more short-sighted.
· Reason for customer loss must be factored into win-back strategy.
'Non-competitive pricing' was referenced as the key factor contributing to customer loss for 44% of
buyers and 46% of sellers. Losing a customer on price often signals that the dismissed supplier's valueproposition has grown stale and needs a boost. To win back the customer without caving on price,
customer value issues must be uncovered and carefully addressed.
· Competitors are using increasingly aggressive tactics to woo new customers away.
In many industries, such as retail banking, firms have long relied on the 'hook principle' to retain
customers. For example, direct deposits of social security and pension checks and automatic monthly
withdrawals for insurance, telephone and utility bills have long kept customers tied to a bank when
they would just as soon leave. Customers felt the red tape required to change banks was a big pain in
the neck, hardly worth the trouble. But our 2007 survey findings suggest competitors are wising up
and sweetening their new customer offerings with switching assistance. For example, among
marketing and sales executives surveyed, 51% reported using incentives for switching (fee waivers or
welcome gifts). Forty-four percent reported helping customers fill out paperwork required for
switching accounts and 30% reported the use of switch kits that clarify steps customers can follow to
move the account. Both business-to-business and business-to-consumer marketing and sales
executives reported using switching tools to woo customers away from competition.
· Firms lack customer focus when targeting operational improvements.
Is customer intelligence driving most firms' operational improvement priorities? Survey findings say
no. When making operational improvement decisions, over half (57%) of marketing executives and
50% of sales executives reported using internal factors or no formal process at all to identify problem
areas and prioritize improvement efforts. Translation? In half or more of the firms surveyed, what's
right for the customer took a backseat to other decision-making influences such as departmental
lobbying, squeaky- wheel dynamics and management "gut feel". Little wonder the customer
experience provided by many firms continues to disappoint.
· Vast majority of executives concur: Customer loyalty is as relevant as ever.
Is customer loyalty dead? Respondents overwhelmingly said no. A resounding 95% of sellers and
92% of buyers surveyed believe customer loyalty is as relevant a concept in today's business world as
ever before. Firms show no sign of abandoning loyalty initiatives. As such, customer win-back
strategies should be an integral part of every firm's arsenal of loyalty tools.
The Time for Win-back is Now
What's the state of customer win-back and lost customer management in your firm? How does your
company compare to the survey findings examined in this paper? Here's an easy 'reality check' to
start your investigation: Simply answer the three questions highlighted in the "Comparative Findings"
section of this paper and compare your answers to the survey findings provided. If you answered
"yes" to all three, consider your firm ahead of most. But your work is far from complete. Your next
charge is looking for new, better ways to leverage the information you have for higher, year-to-year
retention rates.
Were some, or all, of your answers "no"? Take heart, your firm is in the majority and opportunity
awaits! But don't delay. The only thing worse than losing high-value customers is neglecting the
opportunity to win them back. The time to start is now.


***About Jill Griffin
Jill Griffin's clients call her The Loyalty Maker® for good reason. Since 1988, she has led
the Austin-based Griffin Group, helping firms around the globe build fiercely loyal
customers. Clients served include Microsoft, Dell, Toyota, Marriott, Hewlett-Packard, Wells
Fargo, Western Union and Subaru.

Jill's next book, Taming the Search-and-Switch Customer: Earning Loyalty in a
Compulsion-to-Compare World, will hit bookstores March 2009. Jill's book Customer
Loyalty: How to Earn It, How to Keep It was named to Harvard Business School's
"Working Knowledge" list and has been published in six languages. Her co-authored book,
Customer Winback, earned Soundview Executive Book Summaries' "Best Books" award.

Since 2003, Jill has served on the Board of Directors for restaurant chain Luby's
Incorporated, a New York Stock Exchange company with 129 locations and 7,000+
employees. She has served on the marketing faculty at the University of Texas McCombs
School of Business. Her books have been adopted as textbooks for MBA and
undergraduate customer management courses taught at UT and other universities. Jill is a
Magna Cum Laude graduate and Distinguished Alumna recipient of the University of South
Carolina Moore School of Business from which she holds her MBA. Reach Jill at 512 469
1757 and jill@loyaltysolutions.com.
About CustomerSat, Inc.
CustomerSat is the leading provider of enterprise solutions for measuring, analyzing, and managing
enterprise-wide action based on customer satisfaction and loyalty feedback. With advanced
technologies and proven market research techniques, CustomerSat delivers feedback solutions for
service and support, sales and marketing, HR, channel and partner management, IT, website
operations and e-commerce, supply chain management and investor relations. CustomerSat is
headquartered in Mountain View, California, with offices in Europe. For news, product demonstrations
and other company information, visit www.CustomerSat.com or call 1.800.372.7772.