customer recovery management

Systematic customer recovery management is an instrument of customer relationship management and targets customers who have terminated their business relationship with the company or are about to do so.

The basic logic of customer recovery is that many of the potentially lost customers have had positive experiences with the company and have been loyal and satisfied customers for a long time. Against this background, it can be assumed that the company remains in favor with the customer to a certain extent, despite possible annoyance of the customer or a better offer from the competition. Systematic customer recovery aims at specifically addressing this favor in order to revive the business relationship. The systematic recovery of customers can be achieved through a five-step process.

  1. The identification of migrated customers should focus on customers who at least still have a latent need for the company’s products/services.
  2. The subsequent analysis phase focuses on two questions: a) What are the most important reasons for customer migration? b) For which customers – considering their specific reasons for migration – is it worthwhile to initiate certain recovery measures?
  3. The analysis phase is followed by the problem-solving phase. Although this phase can also address individual problems of key customers, it mainly focuses on the systematic causes of migration. A typical problem area is, for example, inadequate communication with customers.
  4. In the phase of winning back the target customers, a wide range of measures is available. This may involve offering material or immaterial incentives for customers in order to revive the business relation.
  5. Finally, the aim of the follow-up phase is to secure and stabilize the revitalized business relationship. In this context, special customer retention actions may be applied for recovered customers.
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