#1 Reason Why Customers Leave

What do you think?  Do customers leave because they found a lower price elsewhere?  This may surprise you..

According to marketing research, price is NOT the number one reason why customers leave.

Product dissatisfaction?  According to a study by the Small Business Administration, that is actually the number two reason.  Price ranked third and was the reason – according to the same SBA study – that 9% of customers changed businesses.  (Only 9 percent of customers leave because of price!)

A recent survey by Customer Care Measurement & Consulting, focused on the most serious problems that consumers – across multiple product categories – experienced in the last four years.

This is interesting.

There are many reasons but the single biggest reason your customers leave is the 2 C reason – Caring and Customer Service.

A study by RightNow Technologies shows that 73% of customers leave because of poor customer service, while the Rockefeller Corporation shows that 68% of customers leave because they think that you do not care about them. And most never even tell a company.  So, what most of your customers really want is you being caring and you providing good customer service.

When it comes to the question of why businesses lose customers, the perception that members of the sales staff don’t care ranks as the leading factor, according to a study of all types of small businesses by the Small Business Administration (SBA).

Nearly 70% of those polled in the SBA study indicated that the perception of a non-caring staffer led customers to leave and buy from other businesses — by far the strongest response of six factors.

Product dissatisfaction ranked second, with 14% of those polled.

Claes Fornell, director of the University of Michigan’s National Quality Research Center, which computes the customer satisfaction index, blames the productivity trap.   With companies looking to do more with less labor or lower labor costs, customer service is one of the areas that suffer.

Firms trim employees and/or training.  Or they hire outside firms, often with foreign call centers, to handle consumer complaints.  “It may be cheaper, but it’s not necessarily better,” Fornell said.  Source: washingtonpost.com

In a Rage

Nearly one in three customers say they have raised their voices at customer service reps and nearly one in 10 say they have cursed at them over the past year, according to this survey.

Saving Labor Costs but Losing Customers

To save on labor costs, many of America’s largest companies have installed software that the industry calls Interactive Voice Response (IVR) systems. Yet more than 90% of financial service consumers say they don’t like these systems.   Source:  USAToday.com

They Want to be Heard

The survey by Customer Care Measurement & Consulting, found that 62 percent of respondents to the survey just wanted to vent and tell their side of the story to a customer service representative.  The largest group – 82% – wanted (no surprise) their product repaired or a service problem fixed.  59% wanted an apology.

Four steps to winning back a dissatisfied customer

1. Apologize for the inconvenience (even if it wasn’t your fault.)
2. Let the customer tell his/her side of the story.  Let them vent.
3. Tell them you will do everything possible to get the problem fixed.  Then do it.
4. Call the customer back to follow up and make sure the problem was taken care of.

   If you know of other effective ways to win back an unhappy customer, I invite your comments so my readers can benefit from your insight and wisdom.

5 Responses to “#1 Reason Why Customers Leave”

1. George brown says:

   February 5, 2010 at 6:08 pm

   The number one issuse is communication, always has been and always will be. Service isn’t everything, it’s the only thing. I have been
   in the office supply and office equipment business for 40 years, I’m
   now 55 years old. My parents were never in, this line of work. Many of the old business were handed down to the little kiddies,or the parents gave them money to start off, are gone. A good example would be in the Chicagoland area, Chandler’s. Gone after 100 + years in the office supply arena. A family business. Keep up the good work, Sincerly, George Brown

   Reply
   • Ann Barr says:

     February 28, 2010 at 3:38 pm

     I appreciate your comment and thank you for visiting!

     Reply
2. Blogs says:

   February 10, 2010 at 3:45 pm

   I am always searching online for articles that can help me. Thank you

   Reply
3. msuya juma says:

   March 3, 2010 at 12:05 pm

   Thanks for nice ideas about costomers

   Reply
4. Ann Barr says:

   March 4, 2010 at 1:45 am

   I’m glad you found the ideas useful!

   Reply