Why Companies Lose Customers and What to Do About It
By Kate Zabriskie
Although Neil Sedaka and Howard Greenfield may have been right about love relationships when they penned their hit, “Breaking Up Is Hard to Do,” when it comes to business, that notion rings less true. Customers frequently break up with their suppliers, vendors, and partners. And guess what? Most of them don’t find it hard.
Are breakups inevitable? Not always, but businesses need to understand the four reasons customers leave and how they can avoid them.
Sometimes customers decide to breakup because they find a better product. They discover something that addresses their needs that’s faster, easier, healthier, more effective, more enjoyable, or improved in other ways that are important to them.
Are you buying the exact same things you were buying twenty or forty years ago? Have you any use for a Walkman? Probably not. Smart companies listen to what their customers want, think beyond those demands, and push themselves to innovate and improve.
- Pay attention. Know what you’re selling, what others are selling, and how your customers are using what they buy from you. What problem are you solving? What would customers buy if you weren’t around? What did they used to buy instead?
- Challenge the status quo. It’s easier to innovate when you’re not being reactive. Don’t wait for a customer exodus to motivate you. Challenge yourself to innovate before you’re faced with no choice. What could you do better?
Leaving for a different product isn’t the only reason customers tell companies goodbye. Good processes count too. Without them, the customer experience suffers. For instance, imagine a movie theater with great films, state-of-the-art sound, pleasant employees, and clean facilities. So far, so good. Now pair that vision with long lines, staff members who can’t figure out to work the cash registers despite their good manners, double-booked theaters, and so forth. Would you risk taking someone you cared about to such a place, or would you choose to avoid the headache and go somewhere else? Most people would prefer to opt for a breakup and avoid potential pain and problems.
The lesson? at a minimum, doing business should not be hard. If you’ve got processes in place that inflict pain on your customers, don’t be surprised when they bolt the minute they find an acceptable alternative.With some diligence, you can avoid the break-up blues and spend many happy years together. Click To Tweet
- Make doing business easy. Walk in your customers’ shoes, and experience your business the way they do. What are you making difficult? What could you make easier? Where are you wasting their time? What used to make sense but doesn’t anymore?
- Borrow from others. Process improvement ideas are everywhere you look if you know how to find them. When you are interacting with other businesses, ask yourself what they are doing well and what you can adopt or adapt.
All else being equal (or even in the ballpark), customers will often break up with organizations because someone else is paying them more attention or better attention. Consistent caring doesn’t happen by accident. It requires organizations to: define great service, hire people who are capable of delivering on those promises, train them how to do it, and put a management team in place to oversee the process.
- Define what you expect. If you don’t identify what A+ service looks like, don’t be surprised when your employees don’t deliver.
- Train people and hold them accountable. Plenty of organizations offer training, but they treat it like a one-and-done activity. After you’ve defined what you want to see and hear, you need to put a plan in place to teach people how. Once they know what they are supposed to do and how to do it, hold them accountable. Reward the good, and coach the deficiencies.
- Don’t get too comfortable. If you think your customers will just be there because they’re there, you’re mistaken. You must earn and re-earn your customers’ business. Look for signs you’ve gotten sloppy or lazy, and take immediate steps to get back to your best behavior and woo your customers again.
The final reason customers will leave a business is price. If customers can get the same product and service they receive from you from someone who charges less, often they will leave. In other words, when the value to price equation gets out of whack, people look elsewhere. That doesn’t mean organizations should race to the bottom and strive to be the low-cost provider. What it does mean is businesses need to ensure they have a value proposition that matters to customers and aligns with the price being charged.
- Shop around. Know what your competitors charge and what they deliver for that money.
- Find out what matters to your customers other than price. What do they care about? What are they happy to pay more for? What are you offering that they don’t seem to value? What should you add? What should you subtract?
Staying in any relationship requires work, and when it comes to customers, many a suiter will try to take them away from you. With some diligence, you can avoid the break-up blues and spend many happy years together.
Kate Zabriskie is the president of Business Training Works, Inc., a Maryland-based talent development firm. She and her team help businesses establish customer service strategies and train their people to live up to what’s promised. For more information, visit www.businesstrainingworks.com.