A study shows that businesses lose 10-25% of their customers every year.
Business experts say attracting new customers is difficult than retaining customers who have experienced your products or services already. And, with this in mind, losing your customers can be frustrating and a setback for your small business.
However, in business, the harsh reality is that you are bound to lose customers from time to time. Ideally, you are able to attract and retain a good number of customers and rely on their loyalty.
Even with efforts to attract and retain customers, some customers will come and go, and sometimes, the number is high. And as a business owner, you need to figure out why your customers are leaving and find a way to reduce customer churn in your business.
Research by McKinsey shows that 13% of customers have a tendency to stay loyal to just one brand. On the other hand, 87% of customers choose to shop around with almost 58% tending to change to a new brand if they are not satisfied.
There are several factors that would push your customers to the doors of your competitors. Some of these factors are inevitable but most of them are avoidable.
1.Bad Customer Service.
Customer service is first and one of the most common factors that push customers to competitors.
As a business owner, you need to understand that in this era, customers are spoiled of choice with so many products or services to choose from. Meaning they are not going to be inclined to stick to your business if you cannot meet their customer experience needs.
Once a customer has a bad experience with your customer service, they will walk out of your door like they never even came in. They will then walk into the business next door with hopes they would give them a good customer experience. For customers, the grass is always greener on the other side if you give them that choice.
Treat customer service as an integral part of your business that can help you stand out. Your customer service staffs are your main business ambassadors and the way they treat your customers is very crucial.
Take time and actually assess how customer issues such as queries, returns, refunds, complaints, etc. are being handled. Care for your customers’ needs and be passionate about meeting them and being reliable.
Actually, 90% of customers will not tell you about your bad customer service, they just walk and never come back. So pay as much attention as you can to your customer service and the experience you give to your customers.
2.Your product or service did not meet customer expectations.
When customers buy your products or pay for your services they have expectations that hope your business, product, or service will meet. Now, when these expectations are not met, there is a problem.
Experts say that it’s hard to change a customer’s mind once they have already experienced unmet expectations. When you don’t deliver, customers are more likely to switch or move to your competitor without even giving you a second chance.
Work towards providing products or services that meet your customer’s expectations. Make sure your product actually does what you say it does. Do as much as possible to make sure your products or services are of good quality and meet your customer’s expectations. Do your research, bring experts on board, and look for advice when you need to. Something as important as using quality materials for your products should not even be a debate.
As a small business, you have definitely made promises to your customers. Make sure your promises are not too bold and unrealistic. A good way to manage your customer’s expectations is not giving them unrealistic promises. Promise what you can give and make sure you deliver it.
3.You have focused on price over value.
Your customers want value-for-money. You need to offer customers value for what they are paying for.
Most small businesses tend to offer low prices for their products or services. Underpricing your products or services does more harm to your business.
Business experts say the price is not always the most important factor in creating a successful business. Put in mind that price is not the only thing that influences a customer’s buying decision.
Think of the value of your products or services. The value of your product or service might make you charge more for it more than your competitors who have big businesses. Think of it this way, how much would you be willing to pay for your products or services if you were a customer? If you think it’s a fair or realistic price, your customers would think so too.
Think of what makes you different and of the added value you can offer and emphasize that instead of low prices.
4.You are inconsistent.
In reality, inconsistency cannot breed progress, growth, or success. On the other hand, consistency breeds trust, one thing your small business can thrive on.
If your customers cannot trust you, they cannot stay with you. People rely on things that are consistent and your business needs to be relied upon by your customers.
Your customers’ trust is a commodity for your business and you should be aware of anything that does not bring consistency.
You need to give your customers a consistent experience with your business, your products or services. This way, your customers get to actually know your business and develop trust along with it.
It’s as simple as this, you surely cannot trust a coffee shop that gets your order wrong half of the time. You will trust the coffee shop that gets your order perfectly all the time.
So, consistent with your branding, customer experience, customer service policies, and product or service quality.
5.You have let your customers forget about you.
This might or might not be in your control.
Most small businesses don’t put much effort into being in contact with their customers. If you don’t make your customers remember you, they will forget you.
You really can’t force customers into your business unless they have a need that your business can meet. However, there is always something you could do.
There is always something you could do to keep your customers around.
Send emails to customers who have been away from your business for a while as a reminder you still exist and that you still value them.
Notify them of your current offers, or of your upcoming promotions. Send them your blog posts or interesting articles that would add value to them. Cale Molson at Veem says such reminders keep you in your customer’s minds until when they need your product again.
Also, remember to give your customers incentives and keep rewarding your loyal customers. This shows you value them and the business they bring.
Remember, the odds of your customers walking away are very high. And it’s, therefore, up to you to avoid the avoidable and be in control of the above factors.
Look deeper into your business and identify loopholes that would make you leak your customers away. Unless you identify these loopholes, they will remain problems for your business.
Remember, customer experience is at the back of it all. Good customer experience will help you retain the customers you already have as you acquire new ones.
Understand your business and your customers and make the necessary changes to remedy the problems you find. Whatever improvement you can make, make it sooner.