Relationship Recovery: An Overlooked Retention Strategy

Sure, customers come and go. But the ones who go often leave their bank in the dark about why they left—and worse, with no effort by the bank to win them back.

Research shows that most customers actually come into the branch to close their relationship. It’s a prime opportunity to try to save the relationship; yet the bank staff usually does very little to keep their business.

An effective win-back strategy requires empowering your frontline staff to take care of the problem quickly and efficiently. The first action: Let the customer know how much your bank values their business. Then uncover their reasons for wanting to leave by asking some open-ended questions:

  • “Why are you considering leaving our bank?”
  • “Can you give me some details about your problem so I can help solve it?”
  • “Have you experienced other problems in the past?”

Then ask the most important question: “What can we do to keep you as a customer?”

If the customer simply can’t be saved or you don’t make an attempt to keep them, don’t give up. Craft a plan that includes a relevant, personalized message, rather than a one-size-fits-all letter or survey. Convey that you care about them and their relationship with your bank.

Consider an exit interview. Research conducted by Marketing Metrics found that at least 50 percent of customers who defect said they would participate in an exit interview; 30 percent would even tell you what you could do to win them back. With those kinds of odds, it’s worth it to ask them for their feedback.

Allow some time to lapse before contacting the customer. Call too soon after the defection and you risk annoying them. Call a few weeks later, however, and you better show your sincerity. The extra time also gives the customer an opportunity to form an opinion of their new financial institution. Then they can make a clearer, more accurate assessment of their former relationship with your bank.

Design the interview so frontline staff can report accurately what the customer said. Here are some points to consider for the exit interview:

  1. Gain as much information as you can by asking the right questions: “What was the major reason you stopped banking with us? Please be specific.” “Did you tell someone at our bank about your problem before you decided to end the relationship?” It’s important to find out that if you do remedy the situation if they’ll bank with you again.
  2. Acknowledge the customer’s past business and how much you appreciated it. “Jill, you were a valued customer of our bank for five years.”
  3. Point out the improvements your bank has made based on the feedback of customers like Jill.
  4. Emphasize how easy and painless it is for the customer to come back (switch kits, for example).
  5. Consider providing some type of a financial incentive for returning (a higher rate, lower fees, a gift, and so forth).

A former customer isn’t necessarily a lost customer. Show that you care about their business by making a sincere attempt to win them back. Your retention efforts not only may impact that customer, but also the people they tell about the encounter. And that’s worth a lot—not just in bottom-line dollars but for your bank’s reputation, too.