Losing customers isn’t anything new or special. It happens to every company, no matter how good your marketing practices are or how advanced your digital infrastructure may be. MSPs, solution providers, IT and business consultants, and tech vendors—whether providing products or services—are no different. Customer retention is a tricky path to follow, sometimes even more so than acquiring new customers.
Why Customers Move On
Customers move on for a variety of reasons. For IT consultants, a client may have found better independent contractors for technology systems advice and implementation. For tech vendors, a client could have found other potential suppliers of IT systems and technology infrastructures. In some cases, budget cuts could impact their ability to maintain outside contractors or the business could be bringing a function in-house.
While external factors may be unavoidable in some cases, retaining customers does often come down to a few things, including:
- Relationship quality
- Customer satisfaction
“Customer retention serves as a reliable statistic for organizations on the quality of work you’re delivering to your clients,” said Greg Heilers, co-founder, Jolly SEO. “As a team, we make it a point to deliver quality content to lessen customer churn rate, improve customer relationships and eventually positively impact our revenue.”
How to Avoid Lost Customers
Can you stop losing customers? You can’t—not entirely. You can’t always predict customer behavior, and however you perform internally, you will never control external conditions that can affect your client’s decision-making processes.
What you can control, however, are these factors:
- Staying up to date with the market
- Pricing your services reasonably at the market rate
- Giving your clients exciting offers
- Proactively anticipating and providing solutions for your customer’s problems
- Reaching out and staying connected
Learning From Lost Customers
Nonetheless, there are lessons we can take from lost customers—provided that you make the effort to understand why they are leaving.
“The scary thing about losing customers due to your shortcomings is when you never get feedback on why they left,” said Carter Seuthe, author of Credit Summit. “Using customer feedback as a KPI will help you address these issues and take considerable measures to avoid losing more customers.”
Here are four things lost customers can teach you about your business:
1. They Point Out Your Weaknesses
A SWOT (strengths, weaknesses, opportunities, threats) analysis will tell you that internal weakness is a substantial contributing factor to your organization's performance. This is because weaknesses stop you from performing at the optimum level due to internal factors.
Lost customers will tell you what you lack, such as:
- Not enough customer feedback channels
- Poor communication with clients
- Lack of promotional offers
- Unreasonable prices
- Poor quality products or services
2. They Remind You of Your Customer’s Value
According to the Sage Journals, customer value is the customer’s perception of a product’s worth compared to its alternatives. Customer value increases when they feel like they benefit more than what a product or service costs.
“In a simple equation, customer value is benefits less costs. Customer value increases when they feel that they are getting their money’s worth by procuring your products and services. Increasing customer value is more beneficial in the long run than acquiring new customers who are still testing the waters,” said Colin Palfrey, CMO of Crediful.
When you start losing customers, it’s important to understand if it is because they no longer felt they were receiving value from your products or services.
3. They Are Your Biggest Lessons
While no one wants to lose customers, they can provide valuable feedback about your organization and how you could improve your products, services, customer experience and more. Take, for example, the following situations:
Feedback: Prices are way too inflated as compared to competitor X.
Solution: Examine costs incurred in production and procurement and see where you can cut costs without sacrificing product quality.
Feedback: Products and services did not deliver as promised.
Solution: Conduct quality control measures to ensure consistency and improve product and service quality.
Feedback: Customer complaints and concerns are not addressed.
Solution: Establish numerous feedback channels, including over-the-counter, phone or social media customer service channels.
4. They Keep You Motivated and Help You Move Toward Success
Losing customers isn’t the end of the world. While there are lessons you can learn from them, lost customers should act as a motivation to improve and reorganize.
In fact, losing customers will help you build customer loyalty in the long run. Once you’ve identified areas for improvement and received customer feedback, you can make changes that will benefit your entire roster of customers.
“You can build customer loyalty through reasonable pricing, regular communication and ensuring that the quality of your services is on top of your game,” said Ben Michael, founder of Michael and Associates. “Unsatisfied customers won’t go through the process of law for you. They will simply disappear.”
Lost customers are also the greatest motivators to success. Did you know that lost customers can be your biggest promoters too? Through several processes of bringing back lost customers and improving products and services, winning back lost customers can help you market your products and services through positive feedback, either through word-of-mouth or social media.
How to Learn From Lost Customers
The single, most crucial thing MSPs and tech vendors should do is not abandon lost customers. Strive to acquire helpful feedback about why they left and re-evaluate your processes to ensure that the customer churn rate decreases.
Learning from lost customers can help you understand what you can do to increase customer loyalty. In the long run, lost customers can provide invaluable feedback that will help organizations stay on top of customers’ consistently changing expectations.
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