Research into why customers defect has shown some very interesting findings.
Research has indicated that typically, three percent of customers defect because it is more convenient to shop elsewhere, such as at a new store closer to home or work. Nine percent of customers choose to go elsewhere because of relationship reasons, such as they know someone or were referred elsewhere by someone they know. Fifteen percent prefer the product or price of your competitor and a further five percent are lost for miscellaneous reasons, such as moving away or having passed away. The good news is that the remaining 68% of customers defected because of perceived indifference.
So what is perceived indifference and just why is it good news? Perceived indifference is when the client suspects you don’t really value their custom or don’t really care about them – and it is good news because you can actually do something to reverse this loss. You have the ability to recapture their interest and retain them as valuable customers. It won’t take much effort but will have a big impact on your bottom line.
Firstly, it is important to re-open the channels of communication. Either ring or email your lost clients and let them know that you have noticed that they have not purchased your goods and services for the past twelve months. Ask them if there has been a particular reason for this and collate this information.
It is important to analyse this feedback and develop appropriate solutions to increase customer retention in your business. Ensure you communicate the findings to all your staff. It is much easier to introduce changes into an organisation if your staff understand the ‘why’ behind the changes rather than them simply being told what to do. Better still, work with your staff to brainstorm ideas and to develop the customer service solutions.
Finally, offer your born-again customers a small gift as a ‘thank you’ for the valuable insight they have provided into your business. This gives you an opening into updating their contact details and an opportunity to continue communicating with them. Also offer these clients a special discount to encourage them to engage with your business again.