Any small business owner knows that loyal customers are the best customers. They will continue to buy from your small business and, better yet, they may refer their friends and colleagues.
However, the typical American business loses 10-25% of its customers every year. Reasons for this attrition are many. Some factors, such as the economic climate, are out of a small business owner’s control. But there are other factors over which you have great influence and when these issues don’t get the right level of your attention and effort, customers leave. Here are five of them.
1. Providing Poor Customer Service
Consumers today have very high expectations when it comes to customer service. Companies like Apple and Amazon have set the standard for excellent customer service, and companies small and large must adapt in order to stay competitive. These leading companies have also proven that putting customer service at the heart of your business model will lead to a more successful business and higher customer retention.
So, what does good customer service look like? It’s all about consistency, reliability, and responsiveness. All it takes is one bad experience and you may lose that customer to a competitor instantly. Every interaction a customer has with your business should make them want to choose you again. Make sure to respond to inquiries and solve problems as quickly as possible. Of course, a friendly smile and positive attitude are also integral to good customer service, so train your staff well.
2. Not Rewarding Customer Loyalty
Even with great customer service, you need to give customers incentives to keep choosing your business over the competition. It’s not enough to just lure new customers with discounts and promotions. If customers don’t feel they’re getting the best value by continuing to do business with you, they may move on to a competitor’s offer.
Monetary incentives are just one way to reward customer loyalty. Learn to continually make customers feel appreciated in small ways such as featuring them in newsletters and sending birthday cards and holiday greetings, as well as by asking for feedback and involving them in the development of new products or services.
3. Focusing on Price Instead of Value
For small businesses, getting involved in price war is rarely a good idea. Maintaining a position as the low-cost provider is challenging because it squeezes your margins and makes it very difficult for you to ever increase prices should you need to. In addition, a larger player will almost inevitably undercut you and steal your customers.
A better approach to ensure customer retention would be to focus on value. Customers derive value not just from a price tag, but also from a variety of factors such as service, schedule and opening hours, accessibility, and quality.
4. Neglecting Technology
Technology is a critical ingredient in the customer retention equation. Nothing will have your customers abandoning their shopping carts — digital or physical — faster than a slow checkout process or lack of convenient payment options. Not only do consumers today have high expectations, but they also have short attention spans and little tolerance for inefficiencies.
Poor technology can cause you to lose customers, and good technology can help you keep them. Make sure your websites are easy to navigate across different devices, especially mobile. Find opportunities to use technology to improve your products or services. For example, if you run a restaurant, consider listing your business on a delivery app such as Uber Eats so you don’t lose any existing customers who might prefer ordering through that service.
5. Not Addressing Staff Issues
Employee satisfaction is a barometer for customer satisfaction. If you can’t keep your staff employed for the long term, don’t expect to keep your customers either. Make sure your employees are properly incentivized, that they’re engaged at work, and are well equipped to be able to take care of customers as best they can. Happy employees lead to happy customers.
Guidelines and policies can be helpful to maintain consistent service levels and standardize problem resolution, but you should also make sure your staff feels empowered to make judgment calls when resolving customer issues. You customers will appreciate that more than having to escalate problems to management.
Learn How to Keep Your Customers Loyal
While some customer attrition is normal, remember, it is far more cost-effective and profitable to keep existing customers than to attract new ones. Avoiding or resolving these five common reasons why customers leave is just the beginning. Building customer loyalty takes time and a concerted effort but, in the end, the payoff is well worth it.
If you found this article informative, please check out our other small business articles to help keep your business running smoothly, such as:
SOURCE - The Hartford - Top 5 Rasons Your Small Business May Be Losing Customsers