Top 10 Reasons You Lose Valuable Customers
By Michael Jess on August 8th, 2016
We all know that the costs of keeping an existing customer are far less than the costs of acquiring a new one.
But what if your customers are not sticking around?
It’s vital that you understand why they’re leaving, so that you know where to channel your retention efforts and really build up your customer loyalty.
Here are our top 10 reasons as to why your business might be losing valuable customers.
1. Failing to build customer relationships
Strong customer relationships are the foundation of a successful business, and when this is lacking, it’s basically a guarantee that your customers will look to other brands. Studies have shown that a number of businesses are negatively affected after mismanaging customer relationships, and that maintaining strong customer relationships is critical to a business’s success.
High customer engagement is a crucial aspect to building loyalty. Strong relationships are built on a series of positive interactions with your customers. Make sure you understand your customers’ behaviours, deliver the service they expect every time, and always respond to them in an appropriate and timely manner.
This point is especially crucial for franchise owners. We look to one of the biggest franchises of all time, McDonald’s, as the perfect example of product consistency. Consumers know exactly what to expect when they eat at McDonald’s, no matter where the restaurant is located. Consistency is arguably one of the most important contributors to their success; McDonald’s operate with stringent and consistent processes that lead to satisfied and recurrent customers.
Small business owners may not be as good at creating this kind of consistency because often they work by instinct. This method is especially ineffective when it comes to sales. Small business owners tend to amp up their sales and marketing strategies when business is slow, and then cease as soon as business increases. This kind of fluctuation cuts the marketing pipeline that created the business influx in the first place, ultimately setting things up for another slow period. Just as product consistency is important, so is a solid and continuous sales and marketing strategy.
Some say silence is golden, but in this case it’s killer. For every month that a customer doesn’t hear from your business, you’ll lose 10% of your influence with that customer. Customers don’t like to feel ignored; just as a customer should be greeted every time they walk into a store, so should their presence be acknowledged by your business. Whether you reach out to your customers via email or phone calls, it’s a great idea to be in regular contact. Communication is key here – talk to your customers about what you can offer them and what they like or dislike about your service. You should always be open to feedback.
4. Ignoring feedback
This brings us to our next point – the importance of feedback. It is critical to listen to your customers so they know you have taken their feedback on board and are working on any issues that require attention. In the world of the internet where markets are increasingly saturated with newcomers, relying on old marketing strategies will make you obsolete. Once upon a time customers only had advertisements and celebrity endorsements to put their trust in – now they have each other. With the rise of social media, customers now have multiple platforms where they can rate, praise, shame and share your product or business, and their voices are louder than ever. Ensure your customers know they are being heard, and that you’re doing something to resolve their issues.
Nobody likes to hear, “Sorry, but that’s our policy,” particularly if the policy in question is unreasonable or unnecessary for the situation. While company policies and guidelines are essential to ensuring that the business runs smoothly, some customer issues will need to be considered on a case-by-case basis. Rules can sometimes be bent, so rather than telling your customer a flat out “no”, take a step back to think about whether there is a better way to approach the issue at hand. If you need to offer an alternative in order to keep a valuable customer happy, then do so.
6. Lack of rewards
If you want to keep your customers on board and happy with your business offering, then they should be rewarded for their loyalty. Promotions and incentive programs maximise customer engagement and are proven to result in higher customer retention. By giving customers something tangible in reward for their business, you also give them a real reason to come back. A successful loyalty reward scheme will pay for itself in the end; complaints will be minimised, sales will increase and customers will be happy.
7. Failing to keep promises
When companies fail to deliver on their brand promises, the result will almost always be a lack of brand loyalty among customers. Consumers will end up searching elsewhere for companies that stick to their word. Just as with brand promises, you should never make an empty personal promise to a customer. If you tell a customer you will return a call or follow up on something, do it within the time frame you initially proposed. If there are circumstances beyond your control that lead to delays, let your customer know as soon as possible. Always aim to over-deliver on your promises.
8. Forgetting to analyse trends
To keep your valuable customers happy, you need to understand their behaviours. Customer analysis allows you to compare data over time to identify consistent trends. Where are your best customers coming from? What are they buying? What service are they using? How much do they spend? Once you know these answers, you can better develop a strategy to respond to these trends. You may learn where your business performs well and where it doesn’t, as well as provide evidence to back your decision making in the future. Although analysing this type of data is time consuming, it is also necessary to ensure continuous profitability.
9. Not knowing your customer
Just as it’s important to analyse customer trends for determining your business direction, it’s also important to know your customer. To attract the sort of customers your want, you need to identify your target demographics down to the very last detail in order to create a brand message that matches their wants and needs.
What are your customer’s personalities or ‘buying personas’? These are imagined, generalised representations of your ideal customer that will help you to understand them, and therefore tailor your marketing strategy towards their specific needs, behaviours and concerns. The strongest ‘buyer personas’ will be based on real data and insights that you gather from your customer base.
If you overshare your message it can become diluted, and you may end up losing customers faster than you gain them. One of the easiest places to fall into this trap is on social media. While it’s important to use social media to engage with customers and foster positive consumer relationships, there is also such thing as social media overkill. Twitter and Facebook have become extremely important platforms that companies use to interact with customers and spread their message, but misusing these channels can rapidly deter customers or push them away.
Too many tweets or a Facebook post frenzy can really irritate customers and might end up being counterproductive. Desperate following is also obvious – ideally, a company should only follow about 10% of their follower count.
Be tactical with your social strategy; all content you post should have a purpose – if it doesn’t, you may end up spamming your customers.
Need more strategies for keeping your customers?
Don’t let your customers give up on you.
Check out these 8 strategies for enticing customers to stay loyal.
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