Why You Lose Customers & What To Do About It

Blogging From The Desk of Alicia Lagarde-Craig and Jeff Craig


Do you know the reasons businesses lose customers?

I'll bet you're going to be surprised about what a major survey showed.

1% die - guess there's not a lot we can do about that.

3% move away - not much you can do about that either if your business only sells locally.

5% follow a friend or relative's advice and change suppliers for what you do. If you were doing a good job of communicating your Unique Selling Point (USP) and why they should do business with you, this shouldn't happen - in fact, you should be getting referrals from satisfied customers.

9% change because they perceive a better value is available elsewhere - same response as the last one.

14% change because of product or service dissatisfaction - you can't please everyone, but you shouldn't lose that many for this reason. All these reasons combined only add up to 32% , what about the rest?

You are not going to believe it, but...68% leave because they don't feel "wanted" or valued. This number should be zero! If you are not contacting all your customers frequently with offers, "what's new", or other reasons to do business with you, they'll leave. Contact your customers at least once per month, this is a must!

Dan Kennedy has a great way of explaining this. He says your customers are your "herd" and you're a rancher. It's your job as rancher (business owner) to grow your herd and fence them in to prevent others from stealing them! Ignore them (don't build & maintain fences) at your peril - they'll wander off or someone will steal them from you!

It is MUCH more expensive to get a customer than to keep one so my advice to you is:

1. If you are not contacting your customers at least once a month but you are spending money to get new customers, STOP! For most businesses, your first priority should be to nurture and build relationships with your customers with frequent contact.

2. Your second priority should be to set up systematic referral and word-of-mouth programs to bring you referrals from those customers.

3. Next, and only AFTER you have done steps # 1 and # 2, test different methods to acquire new customers. Do this only after you have tracking set up to evaluate the cost effectiveness of every dollar you spend compared to the business that results.

To Your Success!