Customers are the backbone of a business. Without customers, a business loses more than revenue: it loses purpose. Attracting and retaining customers is a top priority for any company. Ironically, these are also the top-of-mind challenges most business owners quote when asked about what’s holding them back.
Customer churn plays an important role in today’s business practices. We know that most consumers, even those that tend to be loyal to one brand — and these loyalists are as few as 13%, according to McKinsey — are constantly being lured with attractive offers and reasons to switch.
So why do customers leave? What motivates them to shop around, and ultimately abandon the company they already know and buy products or services elsewhere? It is high time we looked at why your business might be losing their customers and present some solutions to fix it. Here are five common factors that are hindering your customer retention and five effective tips to reverse this trend.
5 reasons why customers leave your business
1. Your product does not meet their expectations
Disappointed customers are unlikely to stick around, and they might share their frustration with people they know and on social media — and we all know the impact a bad review can have. Is your product or service obsolete, buggy or hard to understand?
2. You’re not engaging enough
Your product is great, but it still doesn’t get used to its full potential. Maybe your new features remain undiscovered and your customers have questions that you are not addressing. Maybe their business has changed, and they no longer find a good use for the product. Effectively engaging with customers, showing them what’s new, collecting their feedback — and acting on it! — is vital.
3. You’re not showing the value
4. Competitors are better than you
5. You offer poor customer service
Customer support (or lack thereof) is a strong reason for customers to stick to a company or decide to change. How solid is your onboarding process? How easy is it for new and current users to find help content and support for critical issues? Is your team easy to reach and glad to help at all times?
5 Tips to retain customers
1. Offer training
Giving people the room to grown and the tools to do so can be an effective way to making them stay. Having an enticing learning roadmap will make your clients feel valued, at ease with product updates and new features, and excited about your field of knowledge. You should offer product training as well as related content, providing them with the skills to make the most of your product and understand its value for their company. (Why Customer Education is key to success)
2. Foster a sense of community
Your goal should be to have a solid network of product advocates that are also your customers. If you keep offering good content and promoting social interactions between its members, your community will instinctively and consistently be drawn closer to you. Make sure you have a strong communication plan — frequent, rich and diverse enough. Also, you must ensure that you collect their feedback on a regular basis and that you act on it. While managing this community it is very important to be on the lookout for red flags — things like frequent changes in point of contact, meeting cancelation or an abrupt stop in client communication (when they stop returning your calls or stop opening and responding to your emails). This can be a sign of reasons 1-3 above and you must work harder in those cases to revert that.
3. Show them the value — not only the price
More important than the price of a product is what you get for it — the actual bang for one’s buck. People don’t mind paying a bit more for something if its quality is high and if it fulfils all of their needs seamlessly. We recommend that you are crystal clear about your value proposition — publish it in your homepage, make it known to every sales and customer success team member, print it on a billboard and repeat it every day. Your value proposition is what distinguishes your product from the competitors and the main reason why customers will choose to stay with you.
4. Keep an eye on the market
It is extremely important to be aware of your competitors’ positioning and pricing, as well as their strengths and weaknesses. Having this knowledge will help you shape your offer in a distinctive fashion. In addition, you must ensure you are well informed about your line of business: make sure you subscribe to related publications (national and international) and broaden your business network.
5. Ensure your customer success team is top-notch
We know that a bad customer experience makes people leave, and that a good customer experience makes people stay. This is why you have to make sure your customer success team is proactive about addressing — and solving — problems. Customer support, a somewhat reactive process, must be coupled with customer education and success. Your team must solve your customers’ issues before they become a hindrance or a usage blocker. Your self-help content for product use must be updated, constantly available and crystal clear.
These are a few examples of how a proactive attitude and how tying knowledge sharing with your product release cycle can help you fight customer attrition and foster an ever-growing community of product advocates. Are you ready to implement this?
Find out the return on investment of having a Customer Training Academy as part of your customer loyalty and satisfaction efforts: