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I’m Losing Customers. What Can I Do?

There are a lot of reasons why you may be losing customers. Your job is to determine why. What factors are causing your customers to leave? It may be that more than one factor is causing the problem. To find the answers you will need to dig into the potential problem areas.

Step 1: Start With Analyzing the Numbers

Task: Pull out data on each product/service by region, customer (or customer class) and by sales person for one year by month.

When you analyze these numbers, are there any obvious areas where customer defections are higher than others? Are customers leaving from certain sales people or customer support people? Are there certain products/services where customer defections are higher? For customers that have left, are there any common traits to these customers, i.e. they are in the same industry, are the same size, bought similar product features, etc.?

Step 2: Talk to Ex-Customers

Task: Find out why customers are no longer buying from you.

Your sales and customer support people will tell you a lot of reasons why a particular customer left but their answers may not be correct. We’re not suggesting that your team is lying to you. That may be true but probably not. There are several reasons why they may not know the real reasons behind customers leaving.

First, most salespeople try to build personal relationships with their customers. This helps them get to know what the customer wants and helps retain the customer. But customers don’t always tell the salesperson about problems. Here is an example to help illustrate our point.

You go in to a nice restaurant with your spouse. The waiter does a good job of taking your order and making you feel welcomed. You order the meals and the waiter is prompt in delivering your food. But the food is awful! What do most people do? Do you tell the waiter? Do you tell the manager who asks you how everything was as you leave?

No. Most people don’t say a word and instead stop coming to the restaurant. Worse still, studies show that the dissatisfied customer will tell 27 other people about their dissatisfaction (but not the business).

Step 3: Talk to Your Vendors

Task: Talk to those vendors that also serve your competition.

Talk to your vendors. What is the word on the street about your products/services and company? If a competitor has gained an advantage over you, they are likely to know. If you have a quality issue and your business’ reputation is being damaged, they will know. Remember, it’s in their best interest to have you selling more. Work with them. In fact they may be able to help you improve.

Step 4: Analyze Your Sales & Service Structure

Task: look at your sales and customer service people, compensation structure, training, etc.

Are your sales people hungry? Too hungry? Are they compensated more to get new business at the expense of retain existing business? Are your sales and customer service people keeping up their skills? What training are they taking? Is it effective? How well do they know their customers? How well do they know your products/services?

Step 5: Examine Your Marketing & Sale Promises

Task: Are you making promises that you are not fulfilling?

What promises are you making your customers? What are their expectations of your product/service, your company, delivery times, costs, etc.?

Step 6: Conduct Some Competitive Analysis

Task: What are your competitors up to and how do they position themselves against your products/services and your company?

The market of business is always changing. Your competitors are continuously trying to win over your customers. You need to keep an eye on them so you can react to changes they make that might to lure your customers away.

Step 7: Look at Customer Communications

Task: Are you staying in front of your customers enough?

Your customers probably need regular communications to maintain their relationships with your company. Besides a salesperson calling to sell them more, what other communications do you have with customers? What messages are you sending them?

By working ON your business, growth almost becomes inevitable. Relying on these Steps to Growth can revitalize your company and help you rediscover the energy you need to sustain growth year after year.

What You Will Need:

Losing too many customers should draw the attention of those individuals in top management, sales, customer service and in marketing functions. Make sure to allocate time to work on the issues.

  • You will need hard data on customers, purchases, products/services, etc.
  • You will need a strong champion in top management to make sure the initiatives get the support they need and to ensure the latest crisis doesn’t distract the company or that it returns to the status quo.
  • You will need patience. Getting the answers to why customers are leaving and reversing this trend won’t happen over night.
  • Top Management Champion
  • Allocated Time and People Resources
  • Good Data On Customers, Markets, Products/Services & Company Expertise
  • Broad Involvement & Buy-In By Those Involved in Sales, Customer Service & Marketing
  • Creative Thinkers
  • Execution & Measurement Systems

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