It’s a curious thing in business that we spend so much more time thinking about acquiring new customers than we do making sure that the ones we have already are happy. That is, until it’s time to get them to sign up for renewal, right? But it’s often too late and they’re moving on. Oops! So… why are customers leaving you?
Why are customers leaving you?
Why customers churn out is one of the most-stated goals of Win-Loss research projects these days. Because of that, we here at The Win-Loss Agency have heard it all in interviews. Here are some highlights.
- They don’t need your solution anymore – No harm, no foul here. Things change over time. They can now do it themselves or the problem has simply gone away. Maybe you can sell them something else?
- They don’t need your solution after all – This is classic. Who amongst us hasn’t spent an evening with a well-oaked chardonnay and bought something from eBay at 2am that we realise by 8am we don’t need and will never use. Sure, we can conjure up some reasons why we need it but they’re all fluff. Except in business the same mistake can mean a 3-year contract and big-time cash. Not bad for you as the provider though. You get to make all the money and don’t have to cough up the support costs.
- Your solution doesn’t do what they wanted it to do – This might seem bad but it’s not your fault, really. They asked for a utility van and you sold them a utility van and you trained them on how to operate the utility van. But it turns out that they really wanted an Amphicar Model 770. They thought they knew what they were looking for but really they didn’t. This happens more often than you’d think.
- Your product is buggy and annoying – This is your fault. If a customer buys a product with more bugs than a Volkswagen meet-up and it stays that way through the contract, they’re leaving.
- Your UX is garbage – This often comes up in Win-Loss interviews for smaller providers, particularly online services. One of the biggest complaints is that the UX (and the UI) is dated and ugly. If it doesn’t make sense to the end user then they won’t be inclined to use your solution. And if your competition is all shiny and cool you’re sunk. In this day and age good design is the price of entry. Here are some good cautionary tales.
- You neglected the relationship all along – This is the deal killer right here. Often teams do a poor job of supporting their offering throughout the contract and then have the gall to pour saccharine-coated attention all over the client in the 3 months leading up to renewal in a feeble attempt to say that next time it’ll be better. Too bad they’ve already been talking to your competition and are just waiting for the divorce to be finalised.
Some advice while you’re here
It doesn’t need to be any more complicated than this: customers cost money to acquire. Our friends at SalesForce say that on average it costs as much as 7 times more to acquire a new customer than it does to keep an old one. Yikes! Thus, keeping a customer is more profitable than acquiring new ones. Focus for a moment on the bottom three points above while remembering that it costs as much as 7 times more to acquire a new customer than it does to keep an old one. Remember too that it is easier to upsell existing customers than it is to sell to a new one. So now take just part of the costs that are today being sunk into new customer acquisition and put the cash instead into solving problems like buggy products, junk UX and neglected relationships. Now imaging seeing that profit line in a much better place because of this perspective.
Do you know why your customers are churning out? If now, let’s talk about how a Win-Loss Project can help you out.