Why do customers really leave?
The answer is not as obvious as it seems.
Dan Kennedy, the king of direct marketing explained the reason as follows.
- Customer leave for one of the following reasons:
- 1% die. There’s not much we can do about this one.
- 3% move. Offline, this is due to geography; online, it’s due to shifting interests. You must do all you can to hold the attention of your audience. Some loss is acceptable over time, but stay remarkable and you will minimize the losses.
- 5% switch to something else due to a friend’s recommendation. There is no more valuable referral than that from a friend. Yet, if your customer is truly happy with your product or services, the odds of them leaving are slim.
- 9% switch to a better product or service. The best way to fight this is to make sure your products, services, and offers are simply the best around.
- 14% leave for general dissatisfaction. Again, it’s a good idea to trim the tribe, as you’re never going to please everyone. However, if a customer leaves, make sure you did everything within reason to keep them.
Altogether, those five reasons only add up to 32%. A staggering 68% of customer loss is due to indifference.
If I don’t like a service or it’s not as expected, I don’t argue, I don’t make a scene, I don’t tell them how to fix it. I just don’t go back.
Customer surveys won’t help, the indifferent will either ignore your request for feedback or just answer with “ok”. You’ll never know the problems.
Indifference kills loyalty.
A simple way to avoid indifference is to change it up – change the interaction in simple ways. Give the customer small surprises (eg occasionally upgrade a frequent flyer to business class, or change the store layout).
If you can’t change it up, don’t wait for complaints, or compliments to act – incorporate Mystery Shopping. it remains the best way to get operational insights.
Also see post “Why you can’t depend on 10/10 reviews“.