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Why Customers Leave

by Mr. Victor Sassone

 

Each year businesses spend a significant part of their budget to attract and acquire new customers. At the same time, these same companies spend little to maintain the relationships they already have with their existing customers. Research shows that it can cost five to six times more to attract new customers than to keep existing customer. The result looks something like the back door of the office or store being left perpetually open. Customers come into the business, stay a short while, then leave.

Why do customers leave? Can the "back door" be closed?

According to a US national survey:

1%

died or went out of business (companies sometimes go out of business and we lose their business as a result).

3%

moved away. This could be consumers or businesses.

5%

develop other relationships. What does that mean in a business context? This happens when one of our customers merges or is taken over by another company. Often, only one of the companies' suppliers tends to survive as the companies consolidate who they do business with. We have little control over this situation. Sometimes it just the organization's purchasing department that dictates a change of supplier.

9%

are lured away by the competition. Perhaps by an offer that was more compelling to that particular customer than our perceived service and value. Thus they were able to accept this appealing competitive offer.

14%

leave because they are unhappy with the quality and accuracy of our products or services.

68%

over two-thirds, of customers leave or stop doing business with a company because of an attitude of indifference or poor customer service. The service they get from just one employee that they deal with regularly, who seems to represent the company to them, can have such a big impact on whether or not our customers tend to stay with us. It doesn't take much for a customer to say, "I'm not going to do business with them any more."

 

What is poor customer service from the customer's perspective?

The most prevalent acts of poor customer service we call the Seven Sins of Service. They are:

  1. Apathy — an attitude of indifference or not caring.

  2. The "brush off" — what does that look like? The "brush off" is when we try to rush a customer or pass them off to someone else rather than serving them. This typically happens when we're engaged in other work or some other activity. The customer is made to feel as though they are a "bother" rather than an opportunity.

  3. Coldness — a "cousin" to apathy but not just uncaring, it's unfriendly. Maybe even a little bit of hostility can come into play when we talk about coldness. It could be meanness or it could be shyness. There may be many reasons why people appear to be "cold."

  4. Condescension — "Talking down" is a really good phrase to describe it. Whether intentional or not, it's treating people with disrespect in a way that makes they feel stupid and very uncomfortable.

  5. Robotism — while not a real word, it is descriptive of our just "going through the motions." It may be that we have a script that we're required to follow, that appears mechanical and impersonal. Such as saying, "Have a nice day," even if we don't really care their day is like.

  6. Rule-book — have you ever heard the expression "throwing the rule book at them?" What's that like? It's saying "that's not our policy," a term that frequently inflames customer who want to be treated individually.

  7. Run-around — is when we make it hard for our customers to get to where they need to be, to get the service that they need. Perhaps it's not giving the customer a straight answer, or we transfer customers from person to person within our company or organization. Perhaps we have a very difficult voice response system to navigate through with multiple menu selections. That's a run-around.

These may seem commonplace and even expected in today's world. But in our customer's eyes, these things add up. It's a cumulative process that frustrates customers and causes them to decide whether or not they want to continue to do business with us.

You've experienced it. As a customer, you make choices not to go back to places because of things like this. Do some honest research in your company. Spend some time learning and training your staff to avoid some of the Seven Sins of Service. Close the back door of your business with good customer service. You'll be glad you did.

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About the author

Mr. Victor Sassone

Mr. Victor Sassone (USA)

Victor Sassone is the principal of the Northlake Consulting Group and Co-President of Spectrum Leadership, LLC, both Dallas-based consulting and training firms Previously Vic spent twenty years in various managerial and technical positions in the IBM Corporation. Mr. Sassone is a partner of the Hogan Center for Performance Excellence.

 

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