Why Customers Leave …
What is wrong with assuming price sensitivity? By having discount sales, you gradually convert your relationship buyers into transaction buyers. Instead of thinking about recognition, service, helpfulness and relationships, you gradually train them to think only of your product’s price. You train them to check the prices of competitors’ offerings and to use the Internet for further comparison shopping. You ruin perfectly good relationship buyers by the way you treat them.
Why Customers Leave
Why do customers leave your company, anyway? There are only four possible reasons:
1. They die, or are no longer buying in your category.
2. They are unhappy with the price.
3. They are unhappy with the product.
4. They are unhappy with the way they are treated.
Management teams always focus on reason No. 2. “If we just cut our price below Company X, and let everyone know it, our customers would never leave,” they reason. But research in a wide variety of industries shows that reason No. 4 is the most common factor driving customer churn. Why is this so? Because what binds relationship buyers to your company is not the price alone, it is the totality of the relationship, which includes:
• friendly employees;
• brand identity; and
• product quality and price.
Five Ideas to Help Reduce Churn
Relationship buyers stop buying when you stop loving them and stop treating them as they want and expect to be treated. How can you hang on to relationship buyers?
• Know who they are. Keep track of them in a database. Let your employees at every branch, or on the telephone, know who your gold customers are. Be sure they are treated as gold.
• Communicate with them. Find special ways to build a relationship with them. Thank them for their business.