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Sometimes businesses see a slow decline in their revenue and sales as their loyal customers start to fade away. In other cases, they find their repeat buyers leaving while new business is somewhat steady. Yet it is the loyal customers you want since they cost as much to acquire as a new customer and then generate revenue for years. Here are four common reasons businesses can’t keep loyal customers.
You Cut What They Value
Some companies find that their cost-cutting efforts cost them their best customers. Shifting to lower quality fabrics while charging the same price, removing signature hallmarks associated with your brand and the luxury that justified buying it, the extra services your store offered but no longer does, all risk losing your customers. If you want to reduce the quality of your product, offer a cheaper generic brand instead of decreasing the quality of your flagship brand.
Any study of customer loyalty tendencies and dissatisfied former customers must include a compilation of what the customers value enough to keep coming back to you. Those are the services, products or business practices you need to protect to keep your current customers and enhance if you want to delight them.
They Feel Betrayed
There are times that businesses lose customers because they feel betrayed. It can be little things like promising you won’t share their information and then they receive third-party emails. It could be bigger upsets like changing a return policy in time for the holidays, and people find out they cannot return gifts for a full refund like they expected.
The New and Improved Alienates the Old
Any business that updates itself to try to attract new or younger (or both) customers while dropping what attracted their existing customer base will see loyal customers leave. This is why so many reinventions to change logos, product offerings and essentially abandoning the old model for what one thinks is cutting edge pop culture overwhelmingly fails. In contrast, reinventions that stick to the core message and brand of the company can work.
IBM moving from a computer hardware to computing infrastructure and consulting services company is within their scope. Sears buying K-mart and trying to mix dollar store level items with upscale brands and mashing them into a nasty milieu of semi-middle-class offerings no one wanted compared to the other mid-market retailers out there is an example of what not to do.
Customer Disservice
A lack of customer service can cost you your most loyal customers, such as when a new product rolls out and they cannot get the manual for their new product or software. Sometimes, the customer service problems are due to company policies, such as reducing the number of people on the floor so customers see customer service decline as they wait for assistance. Conversely, a manager who resolves a problem in the customer’s favor will turn a dissatisfied customer into a satisfied one.
Conclusion
Too many businesses lose loyal customers because they neglect them in favor of newer ones. Gaining loyalty is all about consistency and being congruent with your brand. If you manage to steer away from the mistakes outlined in this article, you’ll be yards ahead of your competition.
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