Why Your Business is Losing Customers
Growing a business is best accomplished by growing the number of customers, but retaining existing customers is not likely to be operating at optimal performance. Like it or not, your business is losing customers.
Why customers leave businesses is a complicated subject?
Customers are fickle creatures. They’re easy to lose, hard to win over, and often you don’t even know what’s on their mind. In fact, out of 26 unhappy customers, only one complains, and the rest churn.
Why do people 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.
what are the reasons that your Business is Losing Customers
As a business owner you need to know that as much as it is important to focus on customer acquisition, it is equally important to focus on customer loyalty. Simply because it’s much easier to sell to existing customers than attracting new ones!
- Increasing customer retention rates by just 5% increase profits by 25% to 95%.(Mailcot)
- Attracting a new customer costs 5-25x as much as keeping an existing one. (Vmayo)
- Globally, the average value of a lost customer is $243.(Veetly)
- The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%.
Your customers may not be aware of your full product range
A common reason for customers to stop buying from a distributor or manufacturer is because they are not aware of the full product range on offer. This may cause them to start purchasing a few items from a competitor. Once this occurs, the competitor is given the chance to offer discounts on bundled items. As a result, they may win the business of your customer.
Your products do not reflect current market demand
Another reason customers may choose to leave one supplier in favor of another is that the products on offer simply no longer meet market demand. A typical example includes the increasing demand for eco-friendly products and decreasing demand for products deemed to be environmentally damaging.
Your sales reps do not spend enough time servicing existing customers
Businesses that bring in new customers but forget to look after existing customers lose out on important revenue. Identifying cross-sell opportunities within an existing customer can boost your revenue as well as leave the customer feeling like they got a good deal. However, not identifying these opportunities leaves you vulnerable to your competitors’ sales tactics, and may cause you to lose customers.
They are unhappy with the price
Pricing is one of the most common adjustments companies make when they start to lose customers.
Price can be a major reason why customers leave—and pricing strategy is, of course, an entire area of study in marketing.
At the same time, companies often over-rely on pricing changes to solve problems actually caused by poor customer service or outdated products.
If you do have a legitimate pricing problem, dealing with it might take some research. You’ll need to look at your margins and cash flow, industry standards, and the perceived value you are creating with your marketing.
Don’t Resolve Problems Smoothly
You want every transaction to go smoothly. It is crazy to think that it will always be the case. When there is a problem, your customers need to know that you will go the extra mile to resolve them. If you have a bad habit of not taking care of customer complaints and concerns properly, you will lose customers. Even if your competition doesn’t do anything different or better, it will seem worth checking out something else. Measure customer satisfaction over time and find out if you consistently satisfy those who use your product or service even when there is a concern.
Long Wait Times Cause Customer Walkouts
Don’t let the dawn of the virtual reality age distract you from the basics. If you’re in retail, you’re still likely to have checkout counters in some shape or form.
For most customers, a waiting line that is seven people deep is no different than a waiting line seven hundred people deep.
There are a lot of questions you can ask yourself, but the most prominent is this: Have you implemented a retail queue management system in your retail business?
Chances are, you haven’t. Probably because you don’t think your queuing situation warrants a closer look.
Our Business Competition is Better
It may be flattering to think of yourself as the next Steve Jobs — cocksure and always a step ahead of your competitors. But even business geniuses need a healthy dose of reality check.
If you aren’t staying in one place, you should assume your competitors aren’t, either.
They’re always new kids on the block breathing down your neck — with a bolder perspective and fresh ideas. You shouldn’t hesitate to take a cue from them.
There are three benefits to taking a closer look at your competitors:
learn from their mistakes.
You can learn more about your market.
You don’t have to reinvent the wheel.