The Reasons Why Customers Leave a Business

Whether you realize this or not, your customers are you most valuable asset. It’s at least 10x’s cheaper and easier to sell to your existing customers than it is to sell to a complete stranger. However, at some point every business loses customers. While this isn’t surprising, the reasons WHY most businesses lose customers are very telling.

In Dan Kennedy’s book, ‘The Ultimate Marketing Plan,’ he cites the following percentages and reasons why businesses lose customers.

·         1% die – not much we can do about that

·         3% move away – if they move outside your service area, again, there’s not much we can do

·         5% follow a friend or relative’s advice and switch to their friend’s preferred provider

While we might be tempted to say there’s nothing we can do about this, that’s not true. Once we have a customer, we should do EVERYTHING possible to keep them AND get their friends and relatives as customers also.

·         9% switch due to price or a better product

Now, some of this can’t be prevented, but some of it could be. Why don’t we have the best product? If we do, why don’t our customers know that?

·         14% switch due to product or service dissatisfaction

You can’t please everyone so some of this in unavoidable. However, if they switch due to poor service then this is something we can and definitely should change.

Added up, the reasons listed above only add up to 32%. That leaves an additional 68% for the last reason why the majority businesses lose customers. Do you know why?

68% of customers leave a business because of what they perceive to be indifference. In other words, they don’t feel appreciated. They don’t feel as if they really matter in the eyes of the business and as a result they don’t think twice about leaving to go with someone else.

This really is a sad commentary because the existing or past customer really is the most valuable asset of any business. There should not be any doubt in the minds of your customers that they matter in your world, that you’re concerned about them, and that you appreciate their business.

Given the time of year we’re in right now, this is the perfect time to reach out to your customers to let them know you appreciate their business. If you haven’t already done so, sending holiday cards is an excellent way to contact them. It doesn’t have to be anything elaborate or expensive, but it does need to let them know they matter.

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