Business and Operations
Why companies lose customers (and what to do about it)
By Kate Zabriskie
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, or partners and most 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 20 or 40 years ago? Smart companies listen to what their customers want, think beyond those demands, and push themselves to innovate and improve.
1. 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?
2. 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. Motivate 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 say goodbye to companies. Good processes count too. Without them, the customer experience suffers.
For instance, imagine a movie theatre 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 how to operate cash registers despite their good manners, and double-booked theatres.
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 a breakup to avoid potential problems.
The lesson? Doing business should not be hard. If you’ve got processes in place that cause your customers discomfort, don’t be surprised when they bolt the minute they find an acceptable alternative.
1. Make doing business easy. Walk in your customers’ shoes, and experience your business the way they do. What could you make easier for your clients? Where are you wasting customers’ time? What used to make sense but doesn’t anymore?
2. Borrow concepts from other companies. Process improvement ideas are everywhere you look if you know how to find them. While interacting with other businesses, take note of what they are doing well and what you can adopt or adapt.
All else being equal, customers will often break up with stores because someone else is paying them more attention or better attention. Consistent caring doesn’t happen by accident. It requires delegation. The first step involves defining great service. The second step, hiring people who are capable of delivering on those promises. Then, training your staff and finally, put a management team in place to oversee the process.
1. Define what qualifies as great service. If you can’t identify what A+ service looks like, don’t be surprised when your employees don’t deliver.
2. 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.
3. Don’t get complacent. You must earn and re-earn your customers’ business. Look for signs you’ve become sloppy or lazy, and take immediate steps to get back to your best behaviour and woo your customers again.
The final reason customers will leave a business is price. If customers can get the same product and service from someone who charges less, they will often leave.
That doesn’t mean organizations should race to the bottom and strive to be the lowest-cost provider. What it does mean is that businesses need to ensure they have a value proposition that matters to customers and aligns with the price being charged.
1. Shop around. Know what your competitors charge and what they deliver for that money.
2. 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 suitor 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.