BusinessDay

Why brands lose customers

… and How To Stop

Customers are the biggest assets any company can own and like any other assets, you must invest in them and protect them at all costs. These assets serve as a dividing line which separates flourishing businesses from failing ones. Especially small businesses, for whom maintaining a loyal customer base can be a matter of life and death if not handled carefully.

Providing your customers with a quality service will result in a number of benefits such as repeat customers, more sales and better cash flow, but neglecting your customers will result in a damaged reputation, unconverted leads, reduced customer lifetime value, losing your best employees and — at the end — entering a profit-sucking cycle.

Now that we know of the consequences of bad customer service to the business, let’s find out what causes businesses, especially small ones, to lose their customers and what precautions that can be taken beforehand, in order to deter it from happening.

1. Treating new and existing customers too differently
Customers are attracted to value not “the lowest price or the cheapest in town. This is why sales expert and emotional intelligence coach, Liz Wendling says “It has nothing to do with price and everything to do with the value you are conveying. When your potential customers tell you it is about the money that is actually customer code for “show me the value.”
It’s always much costlier to obtain new customers than to retain existing ones. All businesses, especially small ones, should keep this in mind. Think hard before offering the discounts and incentives to your new customers because your existing ones will notice this act of differentiation on your part which in turn might prompt them to switch to the competition.

2. Placing price above quality
As a business, you should always remember, no matter how low you keep the price of your products/services by squeezing your margins, there is always someone somewhere planning to steal your customers through lower prices. A larger player will easily undercut you to steal your customers. Instead, you should always aim for providing the best value for your product. The price tag is not the only way for your customers to derive value. Remember that value can be derived from service, processes, accessibility, schedule and even opening hours.

A good example of this is Pinnacle, a top grocery brand in Ibadan, Oyo State, famed for its unbelievably low prices. However, the merits of its low prices are totally eroded by its abysmal processes and service. Customers complain of time wastage and cumbersome processes in accessing the shop, paying for goods and packaging. Customers are forced to endure long hours of laborious and unproductive waiting hours before they can enter the store, and spends hours before making payments and having their goods packed. Word on the street is “You save money but waste precious time shopping at Pinnacle.” Whilst the brand still carries on as if unaffected by the bad press and reputation, it is a matter of time before the brand begins to count its losses.

Read also: Bolt to save cost of operation for businesses with special ride offering

3. Ignoring employees’ issues
Customer satisfaction goes hand-in-hand with employee satisfaction. Provide your employees with an engaging environment to work from, and guidelines and policies also help to maintain consistent service levels and standardized problem resolutions. While making judgement calls to resolve issues, your employees must feel empowered. We all know happy employees lead to happy customers.

4. Providing Bad Customer Service
I mentioned this earlier but it’s worth repeating because it’s a big one. Consumers’ expectations regarding customer service have skyrocketed in the recent times. Your primary focus should be on providing excellent customer service via consistency, reliability and responsiveness. It also helps to greet your customers with a friendly smile and a positive attitude.

5. Not Rewarding Your Loyal Customers
Rewarding your loyal customers is something every business (whether large or small) should aim for. Keep in mind, that it is not quite the same things as over-differentiation, as mentioned in item #1. There is a number of ways you can reward your customers such as featuring your customer’s success stories, creating a customer birthday programme, showing gratitude for their feedback, implementing the features they suggest, etc.
Remember, if customers feel that they aren’t getting the best value by being loyal to your company, they won’t hesitate to switch over to your competition. A business’s success or failure depends on a number of factors, however, compared to everything else, none matter more than maintaining a loyal customer base because your company’s very existence may depend on it.

6. Forgetting what (who) keeps the lights on
Every business has principal products or services that form the foundation of the business. Every business also has key customers that form a foundation. Over time key products and service as well as key customers can get taken for granted while newer, sexier, higher profile initiatives get all the focus. Make a list of the customers you can’t afford to lose. Then list what those customers buy. That list is the foundation of your business. Never forget what keeps your lights on.

7. Failing to learn from your mistakes
Today’s businesses have access to more information than ever before. In addition to good old-fashioned books, the internet provides expert resources (and many inexpert resources) on nearly any topic. Entrepreneurs can share ideas and strategies on online forums and networking groups, and don’t forget online feedback.
In the age of social media, there’s no excuse not to know where your customers think you’re going wrong. Failure to follow up and make things right with unhappy customers will not only cost you their business, but it’s also likely to scare prospective customers away as well.

Last line
Your business can recover from a misstep and salvage a customer relationship if you’re willing to acknowledge the mistake, learn from it, and make things right. But, ignoring negative reviews and customer complaints will only lead to lost customers.

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