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Why Are Your Customers Leaving?

Larry Alton

July 11, 2021

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If your business is consistently losing customers, even a solid customer acquisition strategy won't be able to save you. High customer churn has the power to completely ruin a business's potential.

The trouble is, many business owners find themselves perplexed at these high churn rates - they don't know why their customers are leaving, so they don't know how to start putting together a fix.

Every business is different, but there are some main reasons why customers leave a given brand. Understanding these, and ruling some of them out, can help you narrow down the main factors responsible for your high churn rates, and eventually get your business to a better position.

A Frustrating Product/Core Experience

One of the biggest issues is a frustrating product or core experience. This is the centerpiece of your business, so if it doesn't meet customer expectations or somehow declines in quality, you can't blame your customers for leaving.

The best solution here is to conduct product analytics and work to better understand not only your product, but how your customers engage with that product. Where are the main pain points? What can you do to improve the average user experience? Can you offer your product for a lower price or add more interesting features?

An Inexpensive (or Better) Competitor

Some customers will leave simply because there's a competitor offering something better. “Better” here can mean a variety of things. For example, it could be a product similar to yours that's slightly cheaper. It could be a product that costs the same but comes with more robust features. It could also be better customer service.

Whatever the case, you'll need to do a competitive analysis to figure out what else is out there - and find a way to distinguish yourself from those other businesses.

Bad Customer Service

Even a single unpleasant round with customer service could persuade a customer to leave your business forever. These are some of the common culprits:

- Long wait times. People don't want to wait on hold for three hours before they can talk to anyone about their problem. Give them a faster route to connection or allow them to self-serve on your website. If the wait time is necessarily long, try to make up for it somehow.

- Unresolved complaints. Some customers are going to complain no matter how well you perform. The question is, how are you going to resolve those complaints? Are you consistently making up for bad experiences and making customers feel good about staying with your brand?

- Rude interactions. This one speaks for itself. You need to train and educate your customer service reps well so they can provide the best, most polite service to your customers.

- Poor agent knowledge. If your agents don't know how to help your customers, they're not going to be able to do it. It's important to provide your agents with all the resources and materials they need to provide quality service.

Unmet Expectations

Expectations are huge when it comes to customer retention. If you're consistently underperforming compared to customers' expectations, they're going to seek a competitor. You won't have total control over customer expectations, but you can use a simple method to stay on top of them as much as possible: under-promise and over-deliver. Whenever possible, estimate conservatively and promise less than you think you can deliver. Then, it should be easy to over-deliver, giving your customers more than they expect.

Lack of New Features

These days, customers expect a constant revolving door of new features and new options. If you have a software product, you need to be updating it with expanded functionality, higher security, and a better user experience. If you sell a suite of products, you need to add more products to your lineup.

There needs to be new content or new benefits to keep customers interested. Otherwise, they'll lose interest and move onto something else.

No Incentive to Return

Why would a customer come back to your company? If you don't have a solid answer to this question, the problem may be a lack of incentive to return. Are there any loyalty rewards that encourage users to keep coming back? Do you make your oldest and most loyal customers feel good about their relationship to your brand?

Want to know more about why your customers are leaving? Why not ask them directly? When a customer cancels their subscription or doesn't buy anything in a few months, send them a short survey asking them what went wrong, how they're feeling, and what you could have done differently. If you have a handful of customers saying the same things, you'll know what needs to change to put your company in a better position.

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