Fiona Alder, founder of business review site WOMO, looks at the main reasons customers move on.
Through WOMO.com.au – which attracts a review every 5 minutes and is used by 1 in 4 Australians – Fiona is at the coalface of customer feedback daily. She says before you blame the economy or the government for your business being a little quiet lately, find out how many customers actually returned to your business in the last month or year – it may provide some revealing insights. “They say it’s five times harder to win new customers than retain existing ones,” she says.
“Your business may be ‘dumped’ by a customer every day, and you don’t even know it. Rather than focusing your efforts on chasing new customers, looking at why customers aren’t returning can be eye-opening and may require just a few tweaks to your customer communication to make a world of difference.”
Six common reasons why customers leave:
1. You were being difficult
“If you are too hard to contact, don’t answer the phone, or never have room in your schedule, then customers will get over you,” Fiona says. “Most people lead very busy lives and if a customer puts aside time to call up to make a booking, but can’t lock it in within a reasonable timeframe, most are not going to work around you. They are on the phone now calling someone else because clearly it is just too difficult!”
2. They felt unloved
“Customers need to feel they are important to you and not just another number. “Pay them more attention, listen to them, constantly reassure them you can give them what they want. It comes down to your customer service attitude, but remembering (or tracking) their name, likes, dislikes and interests can go a long way to show you care.”
Fiona advises there are simple, low-cost gestures to make customers feel loved: send them an e-card on their birthday, offer special occasion discounts such as on Mother’s Day or Father’s Day. Simple as they are, they all help to make customers feel happy and valued.
3. They were seduced by someone else
We all know existing customers are so important to small businesses. “It’s often said for many businesses 20 per cent of customers produce 80 per cent of their revenue. Too often businesses are offering promotions for new customers without focusing enough on existing and loyal customers. More importantly, you can safely assume your competitors are trying to attract your customers with fabulous offers too. If you don’t give customers a reason to be loyal, they’ll soon start looking around at other offers and could easily be seduced by a better deal.”
4. They didn’t know you could do that!
Unless you constantly promote your entire range of offerings, chances are that even your best customers won’t know about every service you offer. “This gives them an opportunity to go elsewhere, and puts them at risk of leaving you permanently,” Fiona says. “For example, a customer may get a facial at Business A, but will go to a spa (Business B) when they want a massage. Business B is great to deal with and it turns out that they also do facials. Pity that Business A didn’t let their customer know they also provide massages.”
5. You assumed you knew what the customer wanted
“Don’t just assume, do your research. Seek out what people are saying about you online. What are your competitors offering? How are people responding to them? It’s important to listen and adapt to build a positive reputation. At WOMO.com.au we work closely with business owners to advise how they can leverage the feedback they have been given online to engage a strong customer base.”
6. The grass seemed greener elsewhere
“To continually impress your customers, you need to ‘wow’ them regularly,” explains Fiona. “You need to look good, provide fabulous service, please them with your price points, and always keep things new and fresh. If you play old music in your shop, leave a mess, have employees take no pride in their physical appearance, your customers will be bored and unimpressed – which of course results in them looking towards greener pastures. Don’t fall into the trap of regarding customers as ‘just a regular’ – ‘wow’ everyone who walks through your door.”
7. They forgot about you
“Remember, people are busy and have a lot on their plates. They won’t necessarily remember you gave them a great manicure last year, so it’s up to you to keep yourself front of mind,” Fiona says. “It’s a good idea to call, email, or send a letter reminding them that you looked after them last season or last month, and that you’re available for them again. Unless you follow up, chances are they’ll be looking around for another supplier. Set up a program of regular communication and your customer retention will improve dramatically.”