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Customer Churn: 6 Reasons You're Losing Customers & What to Do About It

reasons for losing customers churn

Your business means the world to you, so you’ve invested not only money but your time. This means you may forgo socializing with friends and family, or you sacrifice the occasional vacation. You find that no matter how much effort you put towards growing your company, you have a high customer churn rate.

There are steps you can take to determine why this is happening, as well as strategies you can implement to stop losing customers; strategies that will help you retain customers, improve sales, and grow your business.

 

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Business owners and executives have found that it is easier and more profitable to retain current customers than it is to attract new customers. This is not to say that you should ignore customer acquisition. However, you do need to recognize who your loyal customers are and find ways to keep them coming back.

 

What is Customer Churn?

Customer churn, also known as customer attrition, refers to the loss of repeat business from clients. Your churn rate will determine how successful your company is. The cure for a  high churn rate is retention. The proven way to retain customers is to ensure their satisfaction.

 

Top Six Reasons Why Customers Quit

Before you can begin to reduce your customer churn, you must first determine the reasons that your customers have stopped purchasing from you. That means you need to figure out how and why customers are dissatisfied with your services.

Some of these reasons are easily managed. Other problems are more severe and may require an overhaul of your service or product.

 

1. Lack of Communication

Just like any other relationship, you must keep the lines of communication open with your customers. There are many ways to do this depending on your type of business.

For instance, many businesses utilize a weekly email to keep their customers aware of any ongoing sales or specials. Perhaps you provide a premium service rather than a product. You can have a monthly newsletter that showcases innovations you have implemented that have been benefiting your customers.

People need to be reminded that your business is ready to help them or that your product is available. Emails or personal notes are also a great way to create a dialogue with customers. Simply ask them to respond to your note with feedback.

Then there are those customers that have been with you for years. These are customers who are always satisfied and keep coming back. Be sure not to ever take them for granted! These customers need to be reminded of your business as well. Personal phone calls will go a long way in ensuring that these customers feel appreciated.

 

2. Lack of Innovation

You know that you are good at what you do or that your products are exceptional. But have you checked customer satisfaction recently?

Just because you think everything is running smoothly, doesn’t mean that you are keeping up with customer expectations. If you aren’t careful, they may be courted by other businesses who offer new or exciting products and services. These changes in the market can hurt you.

If other businesses aren’t to blame and customer expectations are seemingly met, maybe you need to evaluate your creativity level. Brainstorming for innovations is a great way to entice your customers to stick with you.

 

3. You Have a High Employee Turnover Rate

People value personal relationships with others. When a person feels valued by a business, they are more likely to be a repeat customer.

You see, your customers not only develop relationships with you, the business owner or executive but your employees as well. If your employees leave as soon as they start, your customers won’t get a chance to know them.

Maybe you’ve just gotten unlucky in the hiring process, or perhaps you are not choosing the right type of employees. Either way, you need to make a stronger effort to hire people who are willing to stick with you for the long haul.

Look for people who have a strong history of long-term stable employment. Once you have a good group of people as the face of your company, your customers will take notice.

 

4. You Continue to Make Mistakes

This reason may require self-reflection and a ton of humility.

Your product or services might be top-of-the-line, but your accuracy at filling orders or being on time executing on clients requests may be lacking. If this is the case, no one will want to be your customer, no matter how good your services are.

For example, when a shipment is incorrect, arrives late or maybe not at all, it makes customers feel as though they are not important. This feeling that their business means nothing to you leads them to find a different company to work with. This problem might be fixed by reevaluating your ordering or shipping practices, or perhaps by investing in some inventory or scheduling software.

 

5. You've Failed to Deliver on Your Promise

Your customers need to be able to rely on you to deliver the goods or services as promised. That means that your product or service must do what you claim it will do.

Perhaps you’ve done great work in the past for a particular client. Unfortunately, the last time they came to you for a service, you failed them. This bad experience may outweigh the other times that you have excelled at what you provided.

When people are dissatisfied with goods or services, they will stop frequenting your business and advise others to do the same.

 

6. You've Lost Their Trust

Your employees always change, and your product doesn’t arrive on time nor does it work. Customers aren’t able to get a response from anyone at your company, and they are dissatisfied. All of these problems will ultimately cause your customers to lose faith in your business and seek out your competitors.

Trust is a key factor in preventing customers from quitting. Once you lose the trust of a customer, they will cease to be your customer.

 

Reduce Churn by Shifting Your Focus to Customer Retention

So what are the best ways to keep your customers coming back?

 

1. Find Your Weak Spots

Once you determine your weak spots, you can begin to fix them. Here are some positive practices.

  • Bring new ideas or products to the table. Innovations impress your clients.
  • Have stable and trustworthy employees and representatives.
  • Take pride in order accuracy, timeliness, and clear communication. Your customers deserve it.
  • Have exceptional goods and services. No one wants second-rate service.

2. Reach Out to Your Customers

Communication is key. Utilize an email or address list to keep customers informed about your business. For long-time customers send personalized notes or even give them a phone call.

Not only should you provide excellent customer service, but you should also be asking your customers for constant feedback about your service.

 

 Related: 9 Best Ways to Build Customer Relationships

 

3. Educate Your Customers

You need to regularly remind your customers what your service or product can do for them. Even if they are a long time customer, everyone can benefit from gaining further knowledge about your company.

If you find that your business is suffering from loss of customers, rest assured. You can improve your customer churn by maintaining the trust of your clients. Building trust is as easy as following the tips listed here. By making a few tweaks to your business, you will keep your customers happy and your revenue high.

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Author Info

Sha Drena Simon

Yokel Local's "Silent Genius," ShaDrena is an ambitious, creative marketer who finds delight in creating compelling digital content powered by strategy, designing powerful imagery, and developing authentic and cohesive brand identities for businesses across a range of industries. Connect with Sha Drena Simon on LinkedIn , Twitter .
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