Like it or not, your business is losing customers.
You work hard (and in many cases spend hard) to acquire new customers. In a perfect world, those customers would stick around.
But, this is not a perfect world.
Recent research from McKinsey & Company reveals that only 13% of customers were loyal to a single brand. The research found that 87% of customers shopped around, and 58% switched to a new brand.
Image courtesy of McKinsey & Company
This begs the essential question – why do people regularly shop around?
What motivates them to abandon the businesses they know and buy products or services from competitors?
It’s time that you take a close look at why your business is losing customers… And, what you can do to fix it.
Here are 6 common reasons why customers leave small businesses … and 12 tips you can use to start turning the tide.
1. Poor Customer Service Experience
Few things can sour a customer experience more quickly than poor customer service.
Your customer service team is not just a department in your company, they are your business’s ambassadors.
They’re on the front lines every day interacting with your customers. In fact, your customers probably interact with them more than anyone else at your business.
To a customer, your support team is your business.
And, a sharp tone, lengthy delays, or a poor resolution all have the power to cost your business a customer.
Shauna Geraghty, a clinical psychologist and head of talent at the global customer support innovator TalkDesk explains:
Customer support is the backbone of any business. It has the ability to make or break a customer’s experience and, therefore, impacts your company’s bottom line in many ways.
But, before you shake your head and say “Our customer service is just fine!” you might want to know that there’s a good chance that you won’t be able to tell that there’s even a problem. Geraghty reveals that:
…over 90% of customers who are dissatisfied with your customer service experience will, rather than telling you if something is wrong and how you can improve it, just not come back.
So, if you’re not paying attention to your customer service policies and performance, there’s a good chance that neglect is costing you customers.
What You Can Do:
Outline thoughtful, positive customer service practices. Start with an internal audit of the policies that govern your team. Conduct interviews with customer support managers and the representatives. Bear in mind that you’re not looking for bad eggs or places to assign blame; instead, you should be looking for points of friction.
Assess what company policies lead to customer dissatisfaction. What internal issues prevent the reps from supporting customers quickly and effectively? Use this data to improve your customer service practices.
And bear in mind these three golden rules of customer service:
- Respond quickly.
- Acknowledge when a mistake is made and make it right.
- Treat the customer with respect and empathy.
Support your customer support team. It’s impossible for your team to do their best work if they don’t have the resources to do their jobs well.
So, give your customer service team the resources they need to provide your customers with awesome service. This includes the technical infrastructure as well as the autonomy to make choices that will benefit your business and support your customers.
And, hey, your business will reap the benefits of happier customers and happier employees!
2. Your Product or Service Failed to Meet Expectations
If your customer’s experience of your product or service is poor, the evidence of that experience speaks for itself. It’s hard to change a customer’s mind about your business if your product or service failed to deliver.
And, honestly, if your product or service isn’t up to snuff, customer’s shouldn’t stick with your business. With a marketplace full of options, they should take their valuable time and money elsewhere.
The effects of a weak product or poorly executed service can be brutal – especially in our fabulous digital age of fast communication.
Disappointed customers are likely to share their disappointment with friends on social media. And angry customers will post angry reviews for other prospective customers to see.
Before you can type h-t-t-p-:-/-/w-w-w-…. your business is losing customers and sales have dropped.
What You Can Do:
Design and build a quality product or service. Your product or service should do what it claims to; and, do it well. Don’t think that marketing magic or any amount of other business trickery is going to make up for a poor product or badly executed service.
So, work with a talented product designer. Test. Build with quality materials. Adapt your service based on customer feedback. Do whatever it takes to create and deliver a service or product that is worth paying for.
Manage expectations. Misaligned expectations can be as detrimental to your business as a weak product. No matter how great your service or product is, if your customers were expecting something else, they will not be happy.
So, make sure you understand what your business’s brand promise really is. What expectation of value are you creating for your customers?
Now, articulate that brand promise and manage the customer experience to fully deliver it.
3. You Didn’t Show the Value
Price is important to most customers.
But price isn’t typically the most important factor.
After all, price is what a customer pays. Value is what a customer gets.
If the price you’re charging is disproportionate to what you’re offering in return, customers will move on to their next option.
Small businesses are generally not in a financial position to engage in price wars. Your business should stand by its prices. (I’m giving you the benefit of the doubt that your pricing was carefully thought out and is proportionate to your product or service… It is, right?)
If your pricing still seems inappropriately high to your customer, then you’ve failed to show the customer the value included in your price.
Sales expert and emotional intelligence coach Liz Wendling points out:
Customers are attracted to value not “the lowest price or the cheapest in town.” It has nothing to do with price and everything to do with the value you are conveying. When your potential customers tell you it is about the money that is actually customer code for “show me the value.”
If you’ve made your price clear to your customer, but not the value they gain… you’re going to lose that customer.
What You Can Do:
Identify your unique value proposition (UVP). What awesome value do you bring to your customers that other businesses don’t? This is your unique value proposition.
In a nutshell, a UVP is a clear statement explaining how you will solve your customer’s problem, the benefits included, and what differentiates your offer from the pack. Taking the time to nail down your UVP internally, will enable you to better explain the value to your customers.
Clearly articulate your UVP on all platforms. Publish the benefits of your product or service on your website home page. Educate your customer support and sales staff so that they can speak fluently about the value included in your pricing. And feature your unique value proposition on the landing page for every offer.
(Check out this article to learn more about creating effective landing pages.)
No matter where your customer meets your offer, the unique value proposition should be there, too.
4. Your Business is Inconsistent.
In business, and in life, consistency breeds trust.
Things that are consistent can be relied upon. And, things that can be relied upon don’t need to be worried about.
The peace of mind that trust brings is a valuable commodity to your customers.
As we pointed out previously,
Customers can’t get to know (and trust) your business if they don’t have the opportunity to experience your brand in a consistent manner.
So, if your business is inconsistent, you’re going to lose trust… and business.
Think about it – would you rather spend your money at the restaurant that gets your order wrong half the time or the restaurant that delivers your customer order perfectly every time?
Inconsistent branding, including using your company’s name or logo differently on your own site and on social networks, inconsistent quality, inconsistent service… any and all of these have the potential to drive customers away.
What You Can Do:
Deliver an experience customers can rely on. This starts with you… and your employees.
- Educate all of your employees about what a good customer experience should look like.
- Create a branding guide to establish uniform branding guidelines and share it with your design team and among everyone responsible for creating marketing content and materials.
- Hold your employees accountable for delivering a consistently positive customer experience.
Create strong customer interaction policies. If you have a refund policy think it through carefully before you launch it. Do you offer exchanges? Store credit?
Whatever your policies are, make sure that they will serve your customers well before you implement them. Then stick with them! Be consistent.
5. You Don’t Learn From Your Mistakes
Today’s businesses have access to more information than ever before.
In addition to good old-fashioned books, the internet provides expert resources (and many inexpert resources) on nearly any topic. Entrepreneurs can share ideas and strategies on online forums and networking groups.
And don’t forget online feedback.
In the age of social media, Yelp, and Google Reviews there’s no excuse not to know where your customers think you’re going wrong. Failure to follow up and make things right with unhappy customers is not only going to cost you their business, it’s likely to scare prospective customers away as well.
Your business can recover from a misstep and salvage a customer relationship if you’re willing to acknowledge the mistake, learn from it, and make things right.
But, ignoring negative reviews and customer complaints will only lead to lost customers.
What You Can Do:
Maintain an active repair presence. The internet provides free feedback. Monitor the most popular review sites and take the time to follow up with dissatisfied customers. Take advantage of this public forum to show that your company is willing to listen to its customers and make things right.
Take negative customer feedback to heart. Listen to complaints and adjust to improve your product or service. This will help you hold onto upset customers as well as improving your business, product or service and creating a better experience for everyone.
6. Your Sales Tactics are Out-of-Date
When I make a purchase, using heavy-handed sales techniques is a great way to guarantee that I will make my purchase elsewhere.
And, I am not alone.
Customers today are savvier than ever and generally resistant to “being closed.”
Aggressive sales techniques are more likely to drive customers away than lead to positive results. Leslie Ye, for HubSpot, writes:
The old sales playbook — dragging prospects through a sales process and strongarming them into a purchase — only worked because there was no better way for buyers to buy.
Today, things have changed. Buyers have access to more information and more options than ever, and salespeople who still operate under the Always Be Closing model will find that ironically, more doors than ever are closing on them.
Leslie isn’t the only critic of pushy, manipulative sales strategies. Private sales coach Stan Way describes these outdated tactics as “like salt on a slug.”
If your sales techniques focus on manipulating or coercing a sale, your business is actively chasing customers away.
What You Can Do:
Employ value-based selling techniques. Take the time to learn what your customer actually needs. Then offer value-based solutions that address those needs. Show how your product benefits the customer and allow them to decide if it’s the right fit for them.
Build relationships with your customers. If you’re trying to sell with every single customer interaction, you’re doing it wrong. Instead, focus on establishing trust with your prospective customers.
Have honest interactions and provide value through useful content and entertaining social media engagement. Then, when a customer needs the product or service you provide – they’ll turn to you, their trusted resource.
Tend to Your Flock
The key to growing a business is to maintain the customers you already have while acquiring new ones.
So, stop leaking customers.
A problem you haven’t identified is still a problem. So, be willing to take a good hard look at the areas where your business may be falling short.
Then take the necessary actions to remedy the problems you find.
Examine your customer service policies, and your product or service itself. Where can they improve?
Can you do a better job showing the value and providing a more consistent customer experience? Then do it!
Are you overlooking customer feedback? Or employing outdated sales techniques? Today’s the day to remedy that.
Your business growth depends on it.
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