Customers are the lifeblood of every business. Falling retention rates are therefore a large cause for concern. Working out exactly why customers are leaving is not always clear, however, there are some common reasons why your retention rates might be in decline.
Anticipating some of these reasons can allow you to reach a better understanding of why your customers are making the decision to leave. So, let us discover 3 potential reasons why you could be losing business.
Bad Experiences
One of the most common, but oftentimes overlooked, reasons why customers leave is when they are unhappy with the way that they were treated. If you fail to provide an outstanding customer experience, there is a chance that your customers will become disillusioned with your business. In the digital age, competition has never been fiercer, and therefore when it comes down to how you treat people, your competition is just about any other company that your customers might compare your products and services to. We all compare our experiences with different companies nowadays and therefore if it is difficult to get support, your customers can feel frustrated. The longer it takes for you to resolve the problems of your customers, the more likely they are to become unhappy.
Customers need to know that you care about them. Authenticity is craved in marketing and business situations and is a valued tenet in customer centric approaches to business. You must demonstrate that you are willing to listen to and understand the problems of your customers. To reduce the potential for bad experiences, train your employees so that they know the customer always has to come first. Additionally, if bad experiences do take place, be sure to put things right and make a promise that the experience will not be repeated. Discounts can go a long way in these situations. The quicker that you act, the more likely that your customers will be willing to give you another chance.
Their Loyalty Is Not Rewarded
Loyalty programs are a fantastic way to reward customers for repeat visits. However, a loyalty program alone is not enough to keep customers coming back for more. It can therefore be beneficial to create a loyalty scheme that is a little different to the programs offered by your competitors. Discounts and opportunities to try new products and services before general release can both go a long way when cultivating customer loyalty and can make sure that your customers feel valued and appreciated.
Introducing gamification to your loyalty program can be an effective way to generate buzz around your company. By offering customers the chance to progress towards a goal with more milestones such as badges, or levels, participation is likely to be higher. Earning and redeeming loyalty points should also be as simple as possible. For maximum impact, loyal and high-value customers should be able to earn a reward within about three months, and other, less frequent customers should be able to earn a reward after about six months. Other types of interactions such as referrals and surveys can also be offered as an incentive to complement the entire brand experience.
They Are Unhappy with Your Products or Services
It might seem obvious, but if your customers no longer like what you have to offer, they are always going to leave eventually. Almost no types of discounts or other incentives are going to make your customers stick around if they are not happy with your products or services. In this case, it is important to find out why people dislike what you have to offer. For example, if your product claims to solve a problem but it does not work, or if it requires a lot of effort to use then you might have a bad product or market fit.
Needless to say, honesty should be integral to your company values. Do not try to claim to solve any problems that you cannot, and do not exaggerate your abilities. Furthermore, be sure to stay in contact with your actual customers so that you can better understand their needs. If customers think a competitor can solve their problems better than you are able to, they are more likely to look elsewhere. Consequently, try to keep tabs on other products and services in your market so that you can reduce your risk of losing customers to your competitors.
Ultimately, there are multiple possible reasons why your customer retention rates might be falling. If your customers are dissatisfied with your products or services, then they are unlikely to return. That being said, there are steps that you can take to ensure that your customers enjoy excellent experiences every time and it is important to remember that the personal touch goes a long way.
Above all, it is inevitable that some customers are only ever going to be with you for a season, but even so, do not be afraid to take a critical look at your company if you have noticed that large numbers of your customers are leaving at the same time. For even more customer service tips, take a look at these 10 commandments for great customer service.
