Customer Success April 22, 2016 5 min read by Alex

5 Reasons You're Accidentally Losing Your Customers

5 Reasons You're Accidentally Losing Your Customers

Few customers will generate as much revenue for your business as the ones that stay for the long term.

Customers leave businesses for a variety of reasons. Some are drawn to a better product or service offered by a competitor. Others need a more affordable or convenient option than the one provided by your company. Some customers just feel like trying something new.

Even the best businesses lose customers from time to time. While some amount of churn is inevitable, it’s important that you understand not just how many customers you lose over the long term, but why they leave your business.

One way to do this is by tracking customer loyalty. Another is by learning the most common reasons customers leave businesses. Below, we’ve listed five ways your business could be losing customers, as well as simple techniques that you can implement to reduce churn.

You’re too focused on pricing and not focused enough on value

When you compete on price, all it takes is a single price cut from a competitor for you to lose your advantage.

Offering the best-priced product or service within your market is a great thing, especially if it’s possible without hurting your ability to grow. But relying on a low price for your sales isn’t such an effective strategy for retaining customers.

After all, any competitor that matches or beats your pricing with a similar product or service has the potential to become a threat to your business. Any customer that discovers a cheaper offer is likely to stray and potentially never return.

Instead of focusing on the price of your product or service, focus on value. Do you offer more or less value than your competitors? If you offer better value, is it greater than the price difference between their product or service and yours?

Lowering prices is a great way to win customers, but rarely a good way to keep them. Instead of offering the lowest prices to earn customers, focus on offering more and more value to retain the customers you already have.

Your product, service or offer isn’t as consistent as it should be

One of the most important characteristics of any product or service is consistency. Businesses that retain customers over the long term deliver a consistent, reliable product or service that is the same one week as it is the next.

Andy Warhol once famously commented that Coca-Cola was one of America’s greatest social equalizers. Every bottle of Coca-Cola tastes the same, no matter where it was purchased, how much it cost or who drinks it.

It is this consistency that has made Coca-Cola such a successful product. Each bottle has the same taste, no matter where you drink it. It’s the same consistency that’s made McDonald’s a hugely successful franchise and Uber an extremely successful service.

When your business depends on repeat purchases or ongoing subscriptions, consistency is one of the most important aspects of retention. Deliver the same product or service again and again, and you’ll win over customers that depend on predictability.

Deliver an inconsistent service or a product that’s different every week and you’ll find customers leaving, especially if they depend on you to run their business.

When your business is growing, it’s easy to let volume get in the way of consistency. Focus on consistency when your business is small and you’ll find it far easier to maintain it as your sales begin to grow.

You don’t have a strong relationship with your customers

How well do your customers know you? Companies with high NPS and great retention don’t just stay silent after they earn a new customer — they keep in touch through email, direct advertising, public relations and more.

How to stay in touch with your customers for a long time?
How to stay in touch with your customers for a long time?

According to consultant Barry Moltz, a small business loses about 10 percent of its influence for every month it doesn’t communicate with a customer. Staying silent can seriously hurt you when it comes to retention since many customers won’t act until they find a reason to.

Understanding this, many businesses rush to send out promotional emails and direct mail letters to their clients in an effort to build a relationship. The end result is poor retention, but not for the same reason — instead of having too little contact, customers end up with too much contact.

As a general rule, Moltz suggests keeping in touch with your customers once a month. Send out useful information, like a how-to guide or an interesting blog post, and avoid sending promotions or direct sales content unless it’s infrequent.

Just like developing an interpersonal relationship is a mix of push and pull, developing a strong relationship with your customers is about achieving a balance between providing useful content without ever being too aggressive or persistent.

Customers can get more (often for less) from your competitors

While having the lowest price in your market isn’t always a good thing, it’s important that your product or service is priced competitively.

In this case, competitive doesn’t mean “affordable” or “cheap.” It means priced in line with the value it offers. Your customers shouldn’t be able to get more from a competitor than they can from your product or service, especially at a lower cost.

If they can, they may not switch instantly. However, the knowledge that they can get equal or greater value at a lower cost elsewhere will affect their loyalty and could, with time, hurt your ability to retain customers.

One of the most effective ways to retain customers is to understand your market. In addition to surveying and studying your customers, study your competitors so that you’re always aware of what you’re up against.

How much does their product or service cost? What value does it offer? What features does it offer beyond those offered by yours? What is it lacking? The deeper your understanding of your competitors, the easier you’ll find it to build a better product that helps you retain customers.

When customers need help, you’re not there for them

Pretend you’ve purchased a new television that turned out to be defective. You boxed it back up, returned it to the store you bought it from and asked for a replacement. Instead of helping you, the staff blamed you for the problem and refused to offer any assistance.

Would you return to the same store again? Unlikely. Situations like this — where a business lets a customer down in a very obvious way — are great opportunities for your competitors to gain a new customer, and for you to lose several.

Imagine a customer had a similar experience asking for help from your business? Do you really expect them to return again?

Unhappy customers rarely remain with your business. They also rarely remain quiet. It can only take one unhappy customer to discuss their experience in public — particularly online — to keep other people away from your business forever.

When customers need help, make sure you’re there for them. Offer service above and beyond what’s expected, and customers that could have easily become Detractors will quickly become passionate Promoters of your business and brand.

Reduce churn and improve your retention rate

Retently lets you track and grow customer loyalty with a simple one question survey. Create a free account at Retently to start gathering feedback and tracking your Net Promoter Score.


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