Top 6 Reasons Businesses Lose Customers (& How To Stop It)
Reducing how many customers you “lose” by just 5% can increase your profits by 75% (source).
That’s a small improvement that yields big results.
Before you can reduce how many customers you lose each month and year, first determine why you’re losing customers…because you are losing customers.
If you’re lucky, a customer will tell you why they’re leaving.
However, most won’t announce they’re leaving or give you an honest reason why.
This is especially true for customers of a small business. Many don’t want to send an email directly to the owner with the hard-to-swallow truth, or harm the reputation of a small business by leaving a bad review (which is a bit easier to do when you see a business as a faceless corporation).
Obviously, you would never knowingly try to frustrate your customers, but there’s a chance you may be unknowingly driving customers away with your business practices.
Here are 6 common reasons customers choose not to buy from a business again.
1) Feeling undervalued or ignored
According to a poll, 96% of customers will leave a business and switch to a competitor due to poor customer service (source).
“Poor customer service” can apply to many things. But think about the last time you were so angry with a business, you wrote (or wanted to write) a bad review.
Chances are you didn’t feel like you were being heard and the business owner or customer service representative didn’t make you feel valued.
That’s a frustrating feeling when you think you’ve been wronged but no one seems to care.
It’s important to make each customer feel heard. Even if you can’t fulfill their request (e.g. they want to return a final sale product), try to let them know you understand their issue and care about it, but are unable to accommodate their request. Explaining why you can’t accommodate a request will also help.
If a customer understands why your policies are in place, it may relieve some of their frustration and help them realize it’s not personal; you just have a business to run.
In general, do your best to support customers before, during, and after a purchase. That support may be helping them make the right purchasing decision, answering emails/messages quickly, helping resolve issues, etc.
2) Long lead times and/or slow shipping
Consumers want instant gratification. In most cases, they don’t want to wait weeks or months to receive their product.
Taking too long to process orders and ship them, or using slow postal services, is the fastest way to frustrate customers and have them vowing never to buy from you again.
Another important note about today’s consumers: They skim text.
Even if the first line of your description states that you require 7 days to prepare orders to ship, or that shipping times are delayed, most people won’t read it.
If longer lead and shipping times can’t be avoided, it’s important to over-communicate wait times.
However, try to find ways to decrease lead and shipping times.
Organize your inventory and create processes that allow you to speed up packaging and labeling orders.
Consider switching postal services or choosing expedited shipping. This will reduce your profits, but may be worth it if it keeps more customers happy.
Alternatively, you may increase prices slightly to incorporate some of the shipping fees into a product’s price. That way, you don’t reduce profits too much.
3) Difficult buying process
If your customers don’t have an easy and convenient way to buy from you, many won’t bother to return.
You shouldn’t use your social media accounts as an online store (unless you use an app that implements a shopping cart function to social media posts, such as Ecwid).
Asking people to comment on a social media post if they’re interested in a product, and then messaging back and forth to organize an exchange of goods and money is too complicated for most consumers.
If you don’t have an online store, you’re losing customers.
Many small businesses sell through craft shows and farmers’ markets, which are great ways to reach new customers, but aren’t ideal for retaining existing ones.
Unless you’re selling at an event that happens at the same time and same location each week or month, most customers aren’t going to stay on top of when your next craft show is and drive to a new part of town to visit you.
Today’s consumer wants convenience.
Make it quick, easy, and convenient for your customers to buy from you again.
4) Underwhelmed with your product/service
It’s important to manage expectations. Don’t oversell your products in descriptions or sales pitches, or heavily edit photos to make your products look better online than they do in person.
Obviously, the best business practice is to under-promise and over-deliver.
Consider ways you can go above and beyond (within reason; you must stay profitable) so customers are “pleasantly surprised” when they get your products home.
That may mean:
- Great quality – If your product falls apart shortly after purchasing, customers are going to be frustrated and won’t buy again. You should put your products to the test before selling them to ensure they’ll stand the test of time. And if you offer a guarantee or warranty, be sure to communicate that to customers.
- Great craftsmanship – When customers look at your products closely, are the details polished? An un-snipped thread or rough edge may not have an effect on how long a product lasts, but it lowers the perceived value of the product.
It’s not just your products that can contribute to or take away from the value customers place on them.
- Great branding / packaging – a product tossed in a bag or box does not give customers the impression that much care was put into their order. Thoughtfully package your products to increase their perceived value (and ensure they arrive at customers’ homes in one piece).
- Great customer service – an average product can seem exceptional when the customer feels as though they’ve been treated like gold. Think of ways you can provide above-average customer service that will elevate the value customers place on your products.
- Great appreciation – as a small business, you should be adding a touch of personalization big corporations can’t. That may be a handwritten note with each order (even if you just write “Thank you” and sign your name) or even a printed postcard that tells each customer how much their order means to you.
Make sure you’re providing value each step of the way. If a customer feels as though the money they’ve spent is greater than the value they’ve received, they won’t return.
5) You don’t respond (well) to feedback
Not every customer is right, but their feedback, and even complaints, hold valuable information to improve your business.
It’s unprofessional when constructive criticism is met with defensive replies or excuses.
There will be many requests you won’t be able to fulfill, complaints that are just rude and/or untrue, and feedback that isn’t helpful. It’s okay to leave these customers be, as there are some people you don’t want as a customer.
But do be open to looking at each piece of feedback from the customers’ perspective and determine if there’s validity to it.
Be sure to reply to each piece of valid feedback you receive. An angry customer doesn’t always equal a lost customer.
You have a chance to turn a situation around and change a customer ready to leave into one who’s willing to stay.
As mentioned in reason #1, customers want to feel heard. If you don’t make any attempt to correct a situation or hear your customers’ criticism, they’ll feel as though you don’t value their opinion and won’t return. They may even tell others to stay away.
6) No reason to return
If you don’t offer other products your customers are interested in, they have no reason to return.
Seems obvious, but so many small businesses make this mistake.
Your store may be full of products, but that doesn’t mean they’re items your customers want.
There must be several products that fit a customer’s exact style/taste/preferences.
You may think you’re appealing to more customers by offering a wide variety of products, but the diversification and lack of focus actually repel more customers than it attracts.
A small business is not a department store. It must have a clear target market and offer products that appeal to people within that target market.
Encourage your customers to return
Once you’re sure you’re not doing anything that deters customers from returning, it’s important to encourage happy customers to return and buy again.
Check out these 10 easy ways to turn more customers into repeat customers.