Recipe For Customer Churn

Over the years I’ve stopped doing business with quite a number of companies. Sometimes it was because my needs changed. More often it was because I was tired of being ignored.

It always amazes me how hard most companies will work to acquire a new customer, and how little they’ll do to keep him.

So, let’s take a test, shall we?


Why Customers Leave My Business

In each blank, please write the percentage of your former customers who left because of:

1 _____ Price.
2 _____ Customer needs changed.
3 _____ Customer service.
4 _____ Quality.
5 _____ Convenience.
6 _____ Functionality.
7 _____ Other.

Go ahead. Take your time. Since there can be multiple reasons, don’t worry about making the totals add up to 100%.

Finished? Shall we compare your results to those of 369 other companies surveyed by Right Now Technologies*, as reported in a recent white paper?

48%--Price.
35%--Customer needs changed.
21%--Customer Service.
17%--Quality.
17%--Other.
15%--Convenience.
14%--Functionality.

Do your answers look anything like these?

Then you’re in deep trouble.

Because while you’re reacting to a perceived price issue, or assuming that customers don’t need you any more, the customers have their own reason for not doing business with you. And their reasons don’t look anything like yours.

Here’s what 300 customers said in that same survey:

73%--Customer service.
31%--Quality.
25%--Price.
15%--Functionality.
15%--Other.
09%--Convenience.
08%--Customer Needs Changed.-

When businesses think that 21% of lost customers are are the result of poor customer service, but 71% of the lost customers cite poor customer service as the reason they stopped buying from the business, we have a recipe for some serious customer churn.

Have you followed up on your lost customers?

Do you know why they stopped doing business with you?

Do you even know whom they are?

* Source: RightNow Technologies,
The Loyalty Connection: Secrets To Customer Retention, 2005