It is a fact that some customers will not do business with you again even if they experience a poor CX just once. As a result you’ll end up losing customers. Businesses today have a pile of data that can benefit them. What we need to analyse here is how much of that data is structured. Structured data can help in providing valuable customer insights. This could change the way businesses offer resolutions to their customers.
Before diving in, let’s first understand why it is essential to retain the existing customers instead of acquiring the new ones.
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Why is retaining customers important?
In addition to measuring a company’s effectiveness in attracting new clients, customer retention also indicates how well it keeps its current clientele happy. It increases the driving force of word-of-mouth advertising, generates goodwill with employees and customers alike, prevents customer attrition—and brings in new business.
Keeping existing consumers is simpler and less expensive than finding new ones. Returning customers are important to develop because they spend more money and buy more frequently. A 5% improvement in client retention can result in revenue improvements for businesses of 25–95%. – source
Customer retention is essential for many reasons, including-
- Affordability: It’s much more cost-effective to keep an existing customer than to find a new one.
- ROI: Companies can increase their revenues by as much as 25%-95% by increasing customer retention rates.
- Loyalty: Retained customers spend more money and buy products or services more frequently than newer customers. They’ve learned the value of a product or service, so they keep coming back repeatedly.
- Referrals: When customers are happy with a company, they tend to tell their friends and family about it — which means more business for the company.
It may seem apparent that businesses should wish to keep their current customers. However, when they experience rapid growth and find developing a solid customer care program challenging, proactive customer assistance for existing clients may get neglected.
11 Reasons for companies losing customers
The old saying “the customer is always right” may be accurate, but it doesn’t mean you have to agree with them. There are many reasons companies lose customers; the most common include a poor product or service, lousy customer service, price increases, and changes in market conditions.
Here are the top 11 reasons for companies losing customers:
1. Poor customer service
Poor customer service is the primary reason for companies losing customers. If a company doesn’t deliver what it promises, or if it makes promises that can’t be kept, customers will quickly lose faith in them. This can happen even if the product or service is good — customers expect good customer service as part of any purchase.
If you want to increase your sales, then you need to improve your customer service. Companies often overlook customer service because they think that it doesn’t affect their bottom line. But if people don’t have a good experience interacting with your company, they might not do business with you again.
2. Lack of Personalization
Personalization is one of the major reasons why businesses loose customers. Todays customer wants to be addressed by his/her name and wants personalized resolution/suggestions. The more personalized their interaction with you is the better CX they are going to have. This helps in establishing faith and transforming your customers into your raving fans.
Businesses today have a pile of data that can lead to customize customer experience and offer personalization at every level. Unfortunately, not many business are still using the power of personalization. In fact,
“71% of customers today expect businesses to offer personalized interactions.”
Personalization today is vital for businesses and the need of the hour. Lack of personalization can lead to customers feeling unhappy even if their query is resolved, leading to loosing them.
3. Didn’t show the value
The value proposition is a crucial part of any brand’s marketing strategy, but it doesn’t always come across to customers similarly. This can be especially true when your business is new, or you don’t have much experience with customer service or sales processes.
To show value to your customers, you need to understand their perspective—what they want from you and how they think about their needs before making any decisions about buying from you. Once you know this information, it will help guide your marketing efforts so that every message helps them see what makes up the best solution for their situation (and why).
4. Business inconsistency
Consistency is essential in many aspects of your business, but retaining customers is imperative. Customers may become frustrated or confused if you aren’t consistent with your approach.
Consistency can also be good when delivering products and services and billing them. For example, if customers were able to get a refund because they didn’t like one product but couldn’t get the same treatment for another item they bought at the same time (such as an umbrella), then there would be no incentive for them to return later when their first choice had been sold out again!
5. Improper pricing
Pricing is an essential aspect of the business. It tells customers what they’re getting in exchange for their money and helps you determine whether to make more money or lose it. Pricing should be based on the cost of production, but many other factors are involved.
For example: If a product costs $100 to produce but sells at $100 per unit, you’ve priced yourself out of the market and will only sell one unit per year (or less). If that same product costs $50 to produce but sells for $200 each, then you have made more money per sale than if all your costs were equal—but now half of your customers would be happy paying the total price instead!
The goal here isn’t just profit; it’s satisfying both buyers and sellers alike while still making a profit overall—which means keeping track of everything from employee salaries down through receipts from suppliers so everything lines up nicely on paper as well.
6. Slow response time
In today’s competitive market, response time is key to customer satisfaction and retention. Customers have high expectations from their businesses. They expect that you will respond to their queries quickly and efficiently. They also hope that you will provide them with accurate information about your products or services so that they can make an informed decision about buying from you in the first place.
Suppose a customer doesn’t receive timely responses from your team. In that case, they might choose another option instead of buying from you again or hanging around waiting for a response from someone else who may not even be aware of the issue yet!
7. Lack of trained agents
Building a solid and knowledgeable team of customer service professionals is one of the essential factors in client retention. Agents must be trained on the organization’s policies and procedures and your business’s products and services. They also need to know how to respond to customer complaints and feedback, which can be difficult if they don’t have the necessary understanding.
Due to inadequate training, both customers and employees experience subpar customer service. Any business looking to improve performance must have a strong foundation in customer service, especially regarding how well employees treat clients at every point of contact (this includes before purchasing something).
Kapture’s learning management system is web-based software that you may access at any time and from any location. It helps you to build, administer, and track online employee education and training programs. It provides a one-stop shop for both pre-and post-training needs and can be used to instruct learners both locally and remotely.
8. Over-promising and under-delivering
Businesses often promise more than they can deliver, which can upset and frustrate customers. To prevent this from happening, employees must be able to accurately assess situations and provide customers with an honest assessment of what they can expect from your company. If you promise something without knowing how to deliver it, people will eventually get frustrated and move on from your company.
The key here is communication: ensure everyone knows what’s happening at all times (even if it’s just between two employees). Suppose there’s no communication about what’s happening with an order or product delivery. In that case, there will be confusion among potential customers who may think something else has happened instead of what happened!
9. Misunderstanding customer’s attitude
Customers have personalities and can react differently when things don’t go as expected. Some customers may understand the problem and even offer to help you fix it; others will get frustrated and leave. Your job is to know how people might react to best prepare for any situation. To get ahead of the curve, you need to be able to anticipate your customer’s needs. You can ask them questions and listen carefully when they answer. This will help you understand what they need and allow you to ask them questions to demonstrate your interest in helping them.
It’s also important to keep track of what your customers say about you. If they’re happy with their experience, you may want to ask them for feedback on how you can improve your products and services.
10. Being unavailable
Not being able to respond to customer queries and provide support will result in lost revenue. Customers don’t want to feel like they’re bothering you, so they will go elsewhere to get better service or products at a lower cost if you’re not available for them.
If you’re not responsive to customers, they’ll go somewhere else where they can get better service. There’s no guarantee that customers will stay loyal to your business if you don’t provide the level of service they expect. You also miss out on opportunities to learn more about your customers. When unable to respond quickly and efficiently, you lose out on valuable information about what your customers want and how they use your products or services.
11. Failure to recognize staff-client relationships
A company’s ability to provide quality customer service depends on the strength of its staff-client relationships. When employee-client relationships are strong, customers are satisfied and will return for future purchases. Companies that want to keep their customers happy must ensure that their employees take care of them by providing the best possible customer service.
To ensure that your employees know the importance of customer service and how it affects their jobs and those of everyone else in the company, you must emphasize this information during orientation or on staff handbooks.
The bottom line
As a customer-centric business, it is important to understand how your customers view your business. An excellent way to do this is by using customer satisfaction surveys. This will help you know what kind of feedback and suggestions your customers have for improvement in the future. It will also help you understand whether they are satisfied with their experience, which can be used as indicators before deciding whether to retain them.
The help desk ticketing system from Kapture offers a single inbox for all support tickets received via phone, chat, website, app, and social media platforms. All service-related communication is gathered and managed on a single platform, among other things, by it. The analysis of survey data enables you to gauge client happiness. The program also offers in-the-moment reporting and analysis of consumer interactions with the help desk, which will help you understand how they interact with your business.
Contact our product team at Kapture to learn more about Kapture’s service crm software, which can help optimize your customer service processes.