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Abstract

Purpose – The purpose of this study is to develop a sales process framework to facilitate business-to-business (B2B) customer reacquisition. A comprehensive CRM process needs to include reacquisition strategies. Yet, very few firms have formal procedures to guide reacquisition efforts. This gap in the sales process reflects the relatively sparse literature on B2B customer reacquisition models. The present research intends to fill this gap and creates a sales process model to guide salespeople to regain B2B lost customers. Design/methodology/approach – Using critical incident technique (CIT), this study conducted in-depth interviews with 54 B2B salespeople. Each salesperson reported one successful and one unsuccessful reacquisition incidents. A total of 108 critical incidents were collected for analysis. Findings – A four-step sales process model to regain B2B customers was developed and empirically supported, including: Segment lost customers; Assess reasons for loss; Develop reacquisition activities; and Implement reacquisition strategies. Research limitations/implications – This study is qualitative and exploratory in nature; future research should develop dyadic surveys to validate the results. Practical implications – This four-step reacquisition process allows sales firms to identify essential elements and establish protocols/policies to train and motivate salespeople. The framework can facilitate salespeople develop problem-focused solutions to correctly diagnose the situation and effectively re-negotiate with defected customers. Thus, this process may help reduce inefficiency in the reacquisition process and increase reacquisition ratios. Social implications – By considering justice/fairness from customer’s perspective, sales firm may properly recover lost business relationship, and do so in ways that are considered both just and ethical. Originality/value – This is one of the first studies to examine the reacquisition of lost B2B customers. It expands on the traditional sales process to include four steps that enable a sales reacquisition process.
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A Sales Process Framework to Regain B2B Customers
Submitted to
Journal of Business & Industrial Marketing
Annie H. Liu*
School of Marketing & International Business
Victoria Business School
Wellington, New Zealand 6140
Office: 644-463-5431
Fax: 644-463-5231
Email: drahliu@gmail.com
Mark P. Leach,
Department of Marketing & Business Law
Loyola Marymount University
Los Angeles, CA 90045, USA
Office: 1-310-338-1906
Email: mleach@lmu.edu
Richa Chugn
School of Marketing & International Business
Victoria Business School
Wellington, New Zealand 6140
Office: 644- 463-6920
Fax: 644-463-5231
Email: richa.chugh@vuw.ac.nz
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A Sales Process Framework to Regain B2B Customers
Abstract
A comprehensive CRM process needs to also include reacquisition strategies. Yet few
firms have formal procedures to guide reacquisition efforts. This gap in the sales process reflects
the relatively sparse literature on B2B customer reacquisition models. This research aims to help
fill this gap and creates a sales reacquisition process model whereby salespeople: (1) SEGMENT
lost customers, (2) ASSESS reasons for loss, (3) DEVELOP reacquisition activities, and (4)
IMPLEMENT reacquisition strategies. Using critical incident technique (CIT), this study
conducted in-depth interviews with fifty-four B2B salespeople. Empirical insight is provided
into each of these four stages in the reacquisition process.
Keywords: B2B Customer Reacquisition Framework, Sales Process, Win Back, Attribution,
Justice Theory
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A Sales Process Framework to Regain B2B Customers
Introduction
Sales executives constantly search for opportunities to gain, retain, and grow business
opportunities for their firms. Yet no matter how effective a company's sales process or CRM
program is, inevitably, some customers will defect and switch to other suppliers. Although there
are well-established sales processes and frameworks to guide salespeople when acquiring new
accounts and maintaining customer relationships, there are remarkably few studies or formal
systems in place to guide customer reacquisition efforts. More research exploring reacquisition
strategies and the development of proven frameworks is needed to provide salespeople the tools
to evaluate reacquisition opportunities and execute reacquisition strategies. Left without these
frameworks and tools, salespeople may engage in reacquisition activities that are either
ineffective or inefficient, or worse, they may participate in activities that run counter to the CRM
goals of their sales firm.
The lack of attention paid to reacquisition in the academic literature is also troubling
given the potential importance of customer reacquisition to a firm’s implementation of a
comprehensive sales process and a CRM program. By reacquiring lost customers with the right
reacquisition strategy, sales executives can often facilitate the creation of higher-value
transactions, form stronger bonds, and redevelop highly profitable relationships with these
buying firms. A well-designed reacquisition framework can also aid companies to better
understand their market and competitive position. With the increasing levels of competition and
customer demands, properly integrated reacquisition programs provide opportunities to improve
companies' sales process and help guide their customer relationship management efforts (Liu et
al., 2012; Stauss and Friege, 1999). Strong reacquisition capabilities can become a source of
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competitive advantage.
Reacquiring "lost" customers differs from acquiring "new" customers in several key ways.
For example, sales organizations can often leverage departed customers’ transaction histories
(Thomas et al., 2004) that are unavailable with new customers. While customers’ relationship
portfolios will usually include information that can be leveraged, some of the past experiences
and relationships may be deterrents to reacquisition. Accordingly, salespeople may need to
counter strong negative attitudes or repair a relationship before any reacquisition initiatives can
be successful. Furthermore, losing a customer to better pricing or value efforts requires a
different reacquisition strategy than losing one after a service failure or other detrimental
challenge to the pre-existing relationship. Most of all, reacquiring any lost customer often
involves reactivating the customers' switching behavior. Since customers' decisions to switch
back typically require a reassessment of a supplier’s relative value of the offering as well as the
relative value of past relationships, salespeople need to assess their windows of opportunity and
persuade customers to “switch back” from the replacement supplier.
Contributing to the marketing and sales literature, this study intends to develop a B2B
sales process framework to facilitate the reacquisition of lost customers. We believe this research
is one of the first to empirically investigate sales activities pertaining to reacquisition efforts in
B2B sales organizations. The results of this paper will provide new insight and information to aid
B2B sales executives to: (1) systematically conduct customer defection analyses by identifying
and segmenting types of lost customers and critically assess defection attributions, and (2) design
reacquisition efforts by selecting and implementing appropriate tactics and strategies.
Literature Review
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In B2B sales, both the buyers and sellers are engaged in a value co-creation process for
economic exchange (Dixon and Tanner, 2012). These exchange and sales processes are complex,
dynamic, and constantly evolving. As the marketplace becomes increasingly competitive and
customers more value conscious, relationships and loyalty may not sustain. In addition, changes
in a customer’s cost structure, personnel, purchasing motivations and goals, changes in the sales
organization’s personnel and process, and competitors’ actions can strengthen or deteriorate an
established relationship (Dwyer et al., 1987). Since salespeople often manage customer loyalty
in B2B relationships, salespeople play a vital role in reducing customer defection, regaining
business, rebuilding value, and repairing relationships (Palmatier et al., 2007; Johnson et al.,
2001).
CRM literature consistently demonstrates the benefits of customer retention, including
financial, attitudinal (e.g., brand preference, positive WOM) and behavioral (e.g., repeat purchase
and referral) (e.g., Reichheld, 1993; Page et al., 1996; Liu et al., 2005). Although the ultimate
goal of CRM is to retain all profitable customers and expand the lifetime value of each customer,
organizations realize a "perfect retention" record is impossible. In response, a body of research
exploring the reacquisition of lost consumers has developed. Specifically, previous studies have
examined competitive pricing, elapsed time, and SLTV (Thomas et al., 2004), relative social
capital and regret (Tokman et al., 2007; Liu et al., 2012), attribution theory (Delela, 2009), justice
perceptions (Homburg et al., 2007), and the influence of cultural norms (Liu et al., 2012) to
regain lost customers.
Recognizing the significant impact of customer defection on overall CRM goals, Stauss
and Friege (1999) present a framework for comprehensive customer management for the
prospect, existing, and lost customers. They identify five types of lost customers (defectors)
based on the prototype of the relationship dissolution including: the bought away, pulled away,
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unintentionally pushed away, moved away, and intentionally pushed away customers (see details
in the conceptual framework section). They stress the importance of identifying profitable
customers through two-way communications and segmentation data.
Literature on service recovery has often applied attribution theory, equity theory (Adams,
1963), and justice theory (Tax et al., 1998) to examine antecedents to recovery and customer
reactions (e.g., Hoffman and Kelley, 2000; Gonzalez et al., 2005). This literature has focused on
customer attributions of service failure (e.g., Swanson and Kelley, 2001), failure typologies and
recovery efforts (e.g., Johnston and Hewa, 1997; Gonzalez, et al., 2010), recovery evaluations
and strategies (e.g., Hoffman and Kelley, 2000), customer complaining behavior (e.g., Keaveney,
1995), and relationship selling and service recovery management (Gonzalez et al., 2005;
Gonzalez, et al., 2010). In general, justice theory and equity theory aim to compare the input
with the outcome. Specifically, justice theory may help evaluate the perceived fairness of win
back offers, reacquisition process, and personal interaction to ensure successful reacquisition
implementation.
Development of the Reacquisition Sales Process
One of the oldest and most fundamental models within the sales discipline is the seven
step selling process (Moncrief and Marshall, 2005). Traditionally, this selling process consists of:
(1) prospecting, (2) pre-approach, (3) approach, (4) presentation, (5) overcoming objections, (6)
closing, and (7) follow-up activities (Dubinsky, 1980; 1981). Given the rapidly changing sales
environment, there have been numerous calls for modernizing and enhancing this process. For
example, Marshall, Moncrief, & Lassk (1999) identify new selling activates stemming from
technology use. Moncrief and Marshall (2005) propose an updated selling process that takes into
account a relationship selling approach centering on assessing and creating value while utilizing
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databases to facilitate the sales process. Plouffe, Nelson, & Beuk (2013) argue that refinement of
the sales process is most needed in the later stages as competition becomes more formidable and
selling cycles are elongated. They develop and test a model that incorporates negotiation
practices into the sales process. While these studies all enhance our understanding of what
today’s salespeople do to facilitate sales, they only examine a sales process that spans from
prospecting, to customer acquisition, to account management. They do not examine lost
customers and the process of reacquisition. Because reacquisition activities are likely very
different from acquisition activities, a comprehensive sales process needs to include the
examination of reacquiring lost customers (Stauss and Freige, 1999). To this end, we develop a
framework of the reacquisition sales process.
Integrating consumer defection and service recovery literature (Stauss and Friege, 1999;
Gonzalez et al., 2005) with our critical incident interview findings, we develop a reacquisition
sales process framework (see Figure 1). This framework consists of two phases (i.e., the
Evaluation phase and the Action phase), and four steps (i.e., segment defectors, assess
responsibilities, develop reacquisition activities, and implement reacquisition strategy). The two
steps in the evaluation-focused phase require sales executives to conduct a customer defection
analysis to gain insights of who the defectors are and why they left. The results of first two steps
are subsequently integrated into designing appropriate reacquisition efforts. The two steps in the
action-oriented phase allow sales executives to map out what reacquisition strategy to undertake
and how to implement activities in order to help ensure effective reacquisition efforts. These two
phases and resulting four steps are briefly elaborated on below.
--------------------------------------------
Place Figure 1 about here
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---------------------------------------------
The Evaluation Phase Defection Analysis
The main purpose of customer defection analysis is to help sales executives
systematically evaluate the patterns of defected customers. By classifying defectors into one of
the five typologies, sales executives can objectively deal with the lost customer by focusing on a
defection prototype rather than the loss or setback. Furthermore, by first identifying the defection
pattern, sales executives can more objectively assess customers reasons for leaving. Since not all
defected customers share same concerns, this objective assessment of defectors will aid
salespeople to assign priorities and design effective win back strategies.
Step I: Segment Defectors Base on Reason for Switching. Recognizing the significant impact of
customer defections on overall CRM goals, Stauss and Friege (1999) develop a framework for
analyzing lost consumers of services. They suggest first segmenting lost customers by the reason
for their defection. Integrating Stauss and Friege's (1999) typology with findings from our
critical incident interviews, we identify and compare five types of B2B lost customers in the
following section.
1. The bought away customers are often on the lookout for cheaper price. As a result, they
are vulnerable to competitive pricing and seldom commit to a long-term relationship.
Since they can be easily lured away by competitor's lower price, bought away customers
can also be bought back with competitive pricing. However, our findings suggest that the
critical issue for the sales firm to consider when regaining this type of customer is:
whether it will stay around long enough to be profitable, and if it is worthy to play the
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"price war" game with competitors. As such, to successfully regain and retain business, it
is necessary that the sales firm develop program to lock in the deal-prone customers.
2. The pulled away customers usually seek better value proposition from alternative
suppliers and look for competitive offers with higher benefits and/or lower costs. The
pulled away customers are strategy-driven and will collaborate with suppliers closely to
co-create better value for the long run. Although they may seem demanding or particular,
they are less deal-prone. Therefore, our findings reveal that the main issue to recapture
the pull away customers is to co-develop value proposition that is unique and sustainable.
3. The unintentionally pushed away customers departed due to mistreatment or negligence.
It is imperative that sales executives apologize for the mistakes to neutralize negative
sentiments before making amends. The unintentionally pushed away customers often
experienced service/product failures, as such, many tactics for service recovery including
compensations, reimbursements, and discounts are relevant and diagnostic to regain their
business. However, findings from our in-depth interview show that when customers
experienced severe or repeated mistakes, a sales firm may need to wait for customer
and/or internal personnel changes before regaining is possible.
4. The moved away customers have no needs or no longer see value in the product/service
offerings. The moved away customers may physically move to different areas that
company can't serve, or they may in-source or internally manufacture products. Several
sales executives noted that although this group of customers may seem lost for good,
making sure relationships end positively is important for referrals and WOM.
5. The intentionally pushed away customers are problematic or unprofitable customers and
the company no longer want their business. Various salespeople commented that the art
of dealing with this group of customers include letting them fire themselves and leading
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them to competitors that may have better match for their needs. Again, positive
relationship dissolution will help sales firms maintain positive brand image.
Step II: Assess Responsibility and Reasons for Loss. In addition to the five prototypes, when
evaluating lost B2B customers, it is critical to understand why they left and the specifics of the
situation that lead to the defection. As such, a second step in the defection analysis is attributional
in nature -- who/what is responsible, will it happen again, and can it be prevented?
Although salespeople tend to make attributions of successes primarily to internal factors
(DeCarlo et al., 2007), in failure situations, salesperson attributions have been found to be related
to both internal and external factors (Dixon, Spiro, and Jamil 2001; DeCarlo et al., 2007). Dixon
and Schertzer (2005) find that whether a salesperson intends to overcome failure by increasing
effort, seeking assistance, or changing strategies will depend on the attributions he or she makes.
Attribution theory helps salespeople identify the cause associated with customer defection. This
process involves the sorting through of various information cues and results in an attribution.
Integrating attribution theory, the attribution process involves a judgment about whether the
cause is something internal or external (Gilbert, 1995), reoccurring or non-reoccurring, and
controllable versus uncontrollable (Weiner, 1980).
Attribution theory can help inform the evaluation of customer defection. Analyzing causal
inferences and interpretations of defection attribution can help sales executives better understand
some of the hurdles they may face with customer recovery. Past literature suggests that
salespeople make attributions about the causes and will work toward achieving a successful
outcome (Dixon et al., 2001). A systematic attribution analysis will help sales executives gain
insights into the reasons customers defected. Specifically, findings from our critical incident
interviews show that the attribution analysis help direct attentions to:
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1. Source: the responsible party may include internal source (e.g., the sales executive, sales
firm), or external source (e.g., customer, competitor, or environment). When the source
of customer defection mainly came from sales executive or firm, an internal evaluation
need to take place to correct mistakes.
2. Stability: If the cause of defection is likely to reoccur (i.e., stable), then it's critical for
sales executives to develop solutions/schema and learn from the situation.
3. Controllable/Preventable: If the cause of customer defection is controllable or
preventable, sales executive are likely to look for cues from future events and take
precautions.
The Action Phase Reacquisition Efforts
Taking into account the reasons and causes of the customer defection enables salespeople
to develop and execute their reacquisition efforts. These efforts most likely require getting
customers to reevaluate their previous decision to leave, reassess relative value among suppliers,
and switch back from a replacement supplier. As such, when planning their reacquisition
strategy, salespeople must not only have a full understanding of what activities, capabilities,
assets are available to them, but must also keep in mind the process by which these can be
leveraged to facilitate positive reassessment by the customer. Therefore, this phase involves
salespeople determining the appropriate reacquisition activities and their potential effects on the
prospective lost customer. We integrated justice theory including three component: distributive,
procedural, and interactive justice for effective implementation of reacquisition strategy (Tax et
al., 1998).
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Step III: Develop Reacquisition Activities and Capabilities. Depending on the types of service
failures, service recovery literature suggests several effective recovery activities. This includes:
apology, price-related concessions (e.g., discounts, compensations, reimbursements), and no
action (Gonzales et al., 2005). In addition, our findings show that reacquisition process requires
sales executives to re-approach and re-negotiate with defected customers. As a result, this
process facilitates co-creation with and customization for buyers. Past research observes that
customization process enables the development of more customer-oriented products/services
which resulting in greater customer satisfaction (Saxe and Weitz, 1982) and more favorable
perceptions of service quality (Parasuraman et al., 1988). This type of customization process is
also likely to evolve into boundary-open transactions allowing the buyer and seller to re-engage
and share feelings with one another (Mars and Nicod, 1984). As a consequence, better
communication, improved processes, and/or new capabilities and expertise are developed, and
relationships are re-energized.
Additionally, several sales executives reveal the importance of active waiting -- a
process to re-engage with customers even if they are not ready to switch back. The purpose of
active waiting is to position the sales firm on the consideration set for the customer's next
buying cycle. As important, active waiting may assure customer's return when the incumbent
supplier falls short on performance.
Step IV: Implement Reacquisition Strategy. Justice theory is mainly concerned with fairness
connected to the implementation of an act, such as win back activities. Perceived justice
comprises three components: distributive justice, procedural justice, and interactional justice, and
suggests that implementing win back efforts should take into account win back offer, process,
and the human interaction elements (Tax et al., 1998).
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1. Win Back Offer -- Integrating Distributive Justice
Distributive justice focuses on the specific outcome of the firm's reacquisition effort. As
such, the sales firm win back offer may include price discounts and product/service
customization (Hoffman and Kelley, 1996).
2. Reacquisition Process -- Incorporating Procedural Justice
Procedural justice focuses on the process, procedure, and system that facilitate the final
outcome (Greenberg, 1990). Therefore, to effectively implement reacquisition strategies,
sales executives need to consider improving process and management approach, and
develop capabilities and expertise to adapt to the customer's needs.
3. Human Interaction -- Considering Interactional Justice
Interactional justice involves with interpersonal activities in delivering win back offer and
executing reacquisition process (Tax et al., 1998). A sales executive's communication
and relationship skills, attitude and willingness to resolve the situation (e.g., apology,
"active waiting") can contribute to positive interactional justice.
Methodology
The goal of this research is to develop a framework illustrating how sales executives
attempt to reacquire lost customers. In order to gain in-depth knowledge of the customer
reacquisition, we conducted critical incident in-depth interviews. Critical incident technique
(CIT) involves the use of specific stories and examples (i.e., incidents) that are content analyzed
with the purpose of uncovering emergent themes, patterns and categories. As a qualitative
methodology, CIT has been found to be particularly valuable at identifying categories and
typologies (Bitner et al., 1990). Respondents for this study are B2B salespeople identified from a
convenience sample developed from a major university’s network in New Zealand. Therefore,
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our unit of analysis is a reacquisition incident. We pre-screened respondents to ensure that
appropriate and knowledgeable individuals were selected to participate in the interviews
(Johnston et al., 1999). No attempt was made to identify salespeople in specific industries.
Therefore, there is ample variability with respect to the good-service make-up of the products
sold and the degree of product customization required by customers. Each followed the same
interview protocol.
We used CIT to investigate reacquisition evaluations by asking industrial salespeople to
describe in as much detail as possible two incidents: an incident where they successfully
attempted to win back a lost customer and an incident where they were unsuccessful. Probing
questions followed to have respondents discuss the past working relationships, the reasons
customers left, the processes and resources used to facilitate the reacquisition effort. Once the
story was captured, we asked the respondents to reflect upon any aspects that helped or hindered
the process and if they would have done anything differently. Finally, we asked respondents to
compare the differences between winning-back lost customers and acquiring new customers.
Following the guidelines of CIT, the number of interviews was not predetermined, instead, it was
determined by emerging common themes and repetition of information (Bitner et al., 1990). All
critical incident interviews were conducted person-to-person and were transcribed and coded in
NVivo 9. Interpretations of the data were discussed, reviewed, and agreed upon among co-
authors before results were finalized to report in this study.
Findings
Sample Characteristics
A total of fifty-four salespeople were interviewed generating one-hundred and eight
useable critical incidents for evaluation. Seventy-six percent (76%) of respondents were male.
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On average, respondents were 39 years old and had over 10 years of working experience. Fifty-
five percent (55%) of the sample had a Bachelor’s degree with 6% having a Master’s or higher.
Forty-three percent (43%) of the respondents were selling a business service. The official job
titles of respondents include: Owner, CEO, Vice President, Managing Director, Head of
Corporate Sales, General Manager, Deputy Managing Director, Operations Director, Director of
Sales Capability, Executive Director, Business Development, Sales Manager, Account Executive
/ Manager, Sales Consultant, Sales Representative, Marketing Representative, Risk Adviser,
Team Leader and Sales Promotion Executive.
The framework represents what salespeople do when reacquiring lost customers.
Practically, all scenarios provide strong evidence that salespeople assess reason for defection and
strategically think through the best strategy to facilitate reacquisition. Given the in-depth
findings of the qualitative data (and for brevity sake in this paper), we present the following 5
examples corresponding to 5 types of defectors to illustrate how each step is adopted by the sales
executives.
Example 1: Bought Away Customers
Step 1: Segment defectors based on reason for switching. Many customers can be bought away
by competitors by offering a better price. Our study showed many examples of such a scenario.
For instance, Director of a building supplies company recalled that he lost a major account
mainly due to price competition. He stated:
“The customer left purely because of price. I don’t think we’ve let them down in terms of
the product, the way we’ve made it, the delivery, you know… I always felt that they were
satisfied. And probably in the end, at a certain point our price may have been a little bit
out of kilter, our opposition might have had some cheaper timber…and all of the sudden
they can beat you in the market place, and so I really do think it’s more to do with price
than anything else.
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Step 2: Assess responsibility and reason for loss. The customer defection can be attributed to
competitor (i.e., external source). In a price-driven market place, such situations were likely to
reoccur (i.e., stable source) and the competitor might decide a threshold to stabilize the price (i.e.,
uncontrollable/unpreventable). As such, the attributional analysis showed that the competitor
threat was eminent and persistent.
Step 3: Develop reacquisition activities and capabilities. As this was a major customer, the seller
tried to win back the customer by waiting and researching the current trend. They devised their
reacquisition by:
...enough intelligence gathering information which came back to say, well, things
weren’t quite as good as they appeared to be to start with…there have been few shortages
and maybe they’ve been let down. We tried to figure out what’s really going on and
becoming their best friend again…it started with a phone call.”
Thus, this scenario showed that the supplier incorporated active waiting (by gathering
information), and better communication to redevelop relationships and to improve processes.
Step 4: Implement reacquisition strategy. The sales executive implemented the reacquisition
strategy by integrating the elements of procedural and interactional justices and focused on
keeping in contact and becoming a best friend with the customer. Overall, “cost to serve” was
also critical, as the sales executive stated:
...maybe in the time when he started to drift away, when he made his decision that he
could save money by buying it differently, if we had been a little more attentive and
promoted ourselves. But if you burn too much money promoting yourself, promoting...
we’ve not got anything really new to offer, so it’s just a matter of servicing that job.”
Example 2: Pulled Away Customers
Step 1. Customers can also be lured away due to competitor's better value offerings. For instance,
sales specialist at a telecommunication service provider mentioned:
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“Customer was a small business and previously left for a better offer. About 12 months
after that we started talking about what we needed to do in order to win them back.
Step 2. Further analysis shows that the cause of customer defection is due to competitor having
better value proposition. The cause may likely to re-occur because of the technology
advancement and better ways of providing service from the competitor. The attributional analysis
shows that the customer is value-focused and strategy-driven.
“And they had a bunch of technical requirements that needed to be met. The agreement
was that if we could meet these requirements they would give their entire business back…
we talked about it and after 2 or 3 meetings they came back… because we started to meet
all their needs and did things as they wanted to happen… It wasn’t difficult to meet
requirements. Not too costly and was relatively simple to win back”
Step3. Under this situation, the sales executive applied active waiting to re-engage the
relationship. The sales firm also developed capability and customized services per the client’s
needs and requirements.
Step 4. The sales executive implemented the reacquisition strategy by customizing services (i.e.,
distribution justice), developing capability required by the client (i.e., procedural justice), and
with better communications (i.e., interactional justice).
Example 3: The Unintentionally Pushed Away Customers
Step 1. There are situations when the customers are inadvertently mistreated or ignored. Such
customers are unintentionally pushed away due to unforeseeable actions of the sales executive or
the sales firm. Highlighting the mistreatment of a client, a Sales and Promotions Executive of a
media company stated that:
“The customer left due to a planned and paid for street activation at a retail store that
never took place because of bad communication. This was the start of their summer
activations and product sales. The issue arose when the local region did not show up at
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the event with the activation and promotional staff. The information and booking was
never passed onto the local region because our Network staff member was away sick...
Step 2. The customer defection can be attributed to the sales executive and the sales firm. The
sales firm seemed to take the responsibility for the mistake, and wanted to ensure that such
incident would not reoccur. The unfortunate cause of customer defection in situation like this
was preventable, and firm usually had ability to control such events by due diligence.
Step 3. The firm's win-back activities included apologizing and taking full responsibility of the
event, in addition to offering the client a special customized offer.
As you could imagine, the client was less than impressed and stripped all promotional
and marketing services with the company. However, due the strong sales/client
relationships, we simply emailed, rang and apologized to the client for the mistake and
took full responsibility…”
Step 4. The implementation of win back in this scenario took into consideration the distributive
and interactional justice elements. Clearly, the firm relied on the strong relationship with the
client which helped in communicating the apology in the right manner acceptable by the client
(human interaction), along with providing special offers to “make good” to resolve the problem.
To gain back the relationship, we offered them two more on site activations at a location
of their choice at no cost i.e. a make good.”
Example 4: The Move Away Customers
Step 1. There are often segments of customers who ‘move away’, either physically move away or
start the manufacturing/service in-house. The sales process framework for customer re-
acquisition in such cases is quite different. For instance, a Sales Representative of a food-
manufacturing firm described:
“The customer felt it was more economical to make this product themselves at a time
when they are more able to. They had the labor to and they could cut costs... By
evaluating the size of the company and the amount of product we had been selling to this
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customer and we felt like we’d taken quite a big hit. It was definitely worth pursuing
them.
Step 2. The cause of defection was due to customer manufacturing products by itself. Depending
on customer's production capabilities, the customer may continue to create and produce the
desired product as economically and efficiently. The attributional analysis shows that the
customer has strong capacity for growth.
Step 3. Even though such “move away” customers are quite difficult to re-acquire, some may be
major accounts (like in the present scenario). The sales executive was actively waiting and
communicating with the client for future reacquisition.
“We offered them an alternative style, like a USP, they could sell. We couldn’t sell the
product at a reduced price however. We still haven’t been able to win them back but
they’ve left the door open. But there may be times in the future when they may need our
services and may look to us as their preferred supplier.”
Step 4. This case also highlighted the distributive and interactional justice to resolve the problem.
However, since the situation is out of control of the firm or sales executive, all their efforts failed
to reacquire the customer. On the positive note, they still left communication channels open, in
case the client decided to out-source the production again in the future.
Example 5: The Intentionally Pushed Away Customers
Step 1. There were few examples of companies trying to intentionally push away customers as
well. For instance, Marketing Manager of a food supplement manufacturer recalled that:
The reason, which also will help explain why he left us, is because we were losing
interest in him, and therefore trying to get rid of him in a certain way… Because he was
such a small account, and very unpredictable with his orders, he was becoming more of a
burden for the company, so I remember deciding to reduce the amount of advertising we
would send him, and eventually the client just stopped ordering from us.”
20
Step 2. Customer defection in such situation is mainly attributed to the sales organization, as they
do not think that the customer is profitable enough in relation to the costs to serve them.
Step 3. Rather than having a win-back strategy, in such situations company plans a termination
strategy. As the sales executive reduced the marketing collateral sent to the client and eventually
letting the client fire themselves.
Step 4. Although there was no reacquisition strategy, the executive focused on interactive justice
and let the client fire themselves.
Managerial Implications
Although CRM literature historically emphasizes best practices/process to acquire and
retain customers, effective sales organizations must not only contend with customer acquisition
and retention but also deal with lost customers and the process to reacquire them. To this end,
the current study constructs a sales reacquisition process framework by integrating literature from
consumer defection, attribution theory, service recovery strategies, and justice theory. The
findings show that customer reacquisition is an integral part of customer relationship
management and that analyzing and resolving customer defection is an important CRM issue.
The results provide strong support for the B2B sales reacquisition process framework and suggest
that sales executives need to manage customer reacquisition with a systematic process.
More specifically, findings from the critical incident interviews highlight the critical
nature of accurately diagnosing losses in order to execute reacquisition efforts. The reacquisition
framework illustrates that effective customer reacquisition requires systematic planning and
execution; it consists of four important steps: segmenting defectors, assessing responsibility,
developing reacquisition activities, and implementing strategies. This four-step reacquisition
21
process allows sales firms to identify essential elements and establish protocols/policies to train
and mentor salespeople to successfully re-approach and regain valuable lost customers.
Specifically, step one segmenting defectors assists salespeople identify defectors’
characteristics and categorize defection patterns. By demystifying the defection patterns,
salespeople can better understand customers’ reasons for leaving (step 2). The purpose of step 2
is to assist salespeople objectively evaluate “who is responsible”, “can it be prevented” and “will
it happen again”. This attribution knowledge may facilitate salespeople develop problem-focused
solutions, rather than coping with the loss of customer or business. Additionally, by
understanding the true cause of defection, salespeople may develop their reacquisition activities
(step 3) more strategically. Step 3 lays out various plausible reacquisition activities for
salespeople to consider. By knowing there are combinations of options available, salespeople
may be able to effectively re-negotiate and co-create customer-oriented solutions to regain lost
business. Finally, to rebuild relationships with lost customers take more than just customer-
oriented solutions to achieve substantiate outcome (i.e., distributed justice). Often, what really
matters to customers is how easy or difficult it is working with the sales firm and/or the sales
team again (i.e., procedure justice); and mostly, how they perceive they are treated fairly (i.e.,
interaction justice).
By integrating a sales reacquisition process framework into the existing CRM, we hope to
provide guidance to sales managers to train and motivate salespeople to properly diagnose and
recover lost customers. As such, it is our hope that this framework will be a valuable tool to aid
sales executives reduce inefficiency in the reacquisition process, increase sales reacquisition
ratios, and effectively assess and reacquire lost customers.
22
Limitations and Future Research
The qualitative and exploratory nature of this research brings with it accompanying
methodological strengths and weaknesses. Although the qualitative critical incident technique
allows for the capture of rich information fundamental to theory development, it is less effective
at delivering findings that are highly generalizable and prescriptive. So while business
practitioners often highly value case-based and qualitative research (Batt, 2012; Johnston, Leach,
and Liu, 1999), we acknowledge its limitations. However, this study can serve to stimulate
interest and further research on this topic.
Specifically, it is our hope that this initial study will stimulate further research examining
the strategies and practices that salespeople use to reacquire lost customers. With further
investigation, generalizable and contextual customer reacquisition frameworks and procedures
can be developed that would allow for the effective training of salespeople and facilitate strategy
development activities among salespeople and sales teams. The development of effective
customer reacquisition sales processes would assist to demystify reacquisition efforts by allowing
salespeople to more objectively and critically examine opportunities and implement tried and true
reacquisition strategies.
Further research examining salesperson resistance, fears, and attributions toward
reacquiring lost customers is also warranted. Many of the sales executives interviewed for this
study expressed having initial reservations about their attempts to reacquire a lost customer. This
was particularly true if there was any negativity or dissatisfaction by the customer. This suggests
that there may be psychological barriers that a salesperson must overcome when attempting to
reacquire customers. These barriers are likely to vary with salesperson attributions pertaining to
the customer defection (Dixon et al., 2001), and associated justice perceptions.
23
Literature on business-to-business exchange relationships and organizational buying
behavior would also benefit from the examination of reacquisition activities. For example,
several sales executives in our sample emphasized the importance of their ability to leverage past
relationships within the lost customer organization. The existence and strength of positive
relations shaped both their reacquisition analysis and efforts. Understanding the types of
relationships and the position that both advocates and blockers within the buying organization
play within the customer buying center may be critical to successful reacquisition efforts. In our
study we only examined reacquisition from the perspective of the selling firm. Understanding
switching-back behavior from a customer perspective is equally valuable. Thereby, further
investigation into the impact of buying center characteristics and dynamics on decisions to return
to a terminated supplier is warranted.
Lastly, we saw signs signifying the importance of competitive and market variables on the
feasibility and success of reacquisition efforts. More specifically, the more competitive the
market the more important reacquiring lost customers seems to become. Conversely, sales
executives in rapidly growing markets seem less interested in the retention of lost customers as
acquiring new customers is relatively easy. However, in our New Zealand based sample, most
executives were in small and highly competitive markets; thus every potential customer was
highly valued. Consequently, another area deserving of future research would be to examine
differences in the reacquisition sales process across various market and competitive conditions.
24
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