- Blog post
The #1 reason buyers bail – and what it takes to retain them
Do you know the main reason people stop doing business with suppliers? Surely it’s because they were mistreated. Or the product failed. Or the vendor screwed up an order or missed a critical deadline.
Studies show that 68% of customers leave simply because they feel they are being treated indifferently.
High customer retention isn’t just about preventing “bad” experiences (although, of course, that’s part of it). It’s also about creating “positives” – good experiences that your customers will remember.
Think about the payoff you could get from keeping more customers. If your typical churn rate is 20%, for example, you can grow your account base by 10 percentage points a year simply by cutting defections in half.
Just okay isn’t good enough
Be honest. Are any of your buyers out there feeling that you’re not paying enough attention to them? That you’re not thinking about their problems? That you’re not totally committed to meeting their needs and solving their problems?
If your customers were asked how you’re performing as a vendor, how many would say, “They’re okay – no problems”?
The research says that sooner or later you’re going to lose customers who think about you that way.
Which is why preventing problems is not a customer retention strategy, and absence of negatives is not a testament to your value as a vendor.
To boost retention, create the kind of experiences that would prompt buyers to say: “They’re fantastic. They go the extra mile. We’d never consider using anyone else.”
What it looks like
Here are some examples:
- An application service provider that runs its clients’ online e-business sites cuts reimbursement checks weekly, instead of monthly, and calls customers to verify that the check arrived on time. It’s more work, but the buyers notice the faster cash flow.
- One sales rep reads the trade press religiously and mails or e-mails articles of interest to his customers. Then he goes the extra mile to create a positive experience: He uses the article to spark a conversation where he probes for potential problems and opportunities to provide better service.
- A graphics design firm systematically delivers a few days ahead of deadline. It’s not always easy, but it helps the company stand out in a business where everyone else is delivering at the last minute. (This same company, by the way, includes chocolates with every invoice.)
- A sales rep for a broker that provides lists to marketers scans all his customers’ orders at the end of each month. When he spots a list he suspects will perform poorly, he calls the customer and shares his perspective on the list. Seems crazy, right? Why “unsell” an order the customer already placed? In fact customers often do cancel these orders. But they usually end up ordering another list instead. And the good will is incalculable: Customers see that the rep: 1) understands their business, 2) cares about their bottom line, 3) is paying attention, and 4) believes the relationship is more important than an order or two.
The first step is to learn why departed customers chose to leave. Call them and ask them. And don’t accept evasive answers. Tell them you want “the real reason” they left. Then sit down and come up with 10 ways you could create positive experiences for existing customers. How can you show them you’re passionate about helping their companies succeed? Your competitor probably isn’t thinking that way. Seize the advantage.