Losing Customers? What You Can Do to Help Stem the Loss

It's often easy to see when you’re losing customers. But what are some of the reasons why businesses start to shed customers, and how can you help stop it?
April 11, 2017

If your business is losing customers, it isn't hard to spot the signs. Slowly but surely, you don't have as much work to do, fewer orders or less people coming through your door. 

But it's not always easy to know why you're losing customers. Is it because your business is doing something wrong or due to increased competition? Are you turning people off, somehow, when you greet customers or meet clients? 

If you are losing customers or believe you're at risk for a mass exodus, consider taking the advice of these business owners who have been there and stopped a customer exodus from happening.

1. Start focusing on customers who are a better fit for your company. 

Najeeullah Babar is the president of Dallas-based Interloper Inc., a web development and consulting firm. Years ago Babar found he wasn't getting a lot of repeat business from clients—and many of those who were willing to work with him wanted to first negotiate for a lower price.

“After doing some thinking, we came to the conclusion that we were signing up the wrong customers," Babar says. "We were signing up clients who are very price sensitive but price is not our strength, service is."

So Babar's company began going after customers who appreciated the company's quality and service and were willing to pay a little more.

“Now we manage fewer clients but they are ongoing relationships and much more profitable," Babar says. “Bottom line: Don't pursue every client. Pursue those who are a better fit."

2. Go back to the drawing board and focus on your main product. 

This may be painful to consider, but if you were doing well and now you aren't, take a look at your product or service. If what you've been doing has led to the downturn, you may want to consider going back to what was working in the first place.

[Your goal is to make sure that] the customer has many warm, fuzzy feelings in doing business with you before there is a mistake.

—Cindie King, owner, Black Dog Logistics

Tom Justin, a marketing consultant, speaker and business coach based out of Las Vegas, says that one of his clients had a water conditioning product that had seen early success. But in the second year, sales weren't increasing as fast and profits were down. According to Justin, the CEO kept upgrading and improving the product, which is admirable, but often they were cosmetic, like making slight design changes.

"He'd also introduced new companion products that were about breaking even. He had plans for more of the same," Justin says.

Justin suggested that he close out the ancillary products and just focus on the main one until his primary product's sales doubled. Then he could branch out.

The client did just that, and sales and profits rose.

3. Improve your employee's morale.

Sure, it may sound implausible at first. But it can be that simple, according to Justin.

Justin once worked with a billion dollar multi-national Japanese company that had been in the United States for a few years. At first, they were on fire, sales going better than anyone had dare hoped.

“However, sales began to even out, then drop," Justin says.

Since the company sold products through independent distributors, they tried having sales contests and boosting commission on some of the products. You'd think a higher commission would have done the trick, but it didn't. After surveying executives, employees, top distributors and even some disgruntled customers, Justin finally figured out that the morale was low in the customer service department.

With this knowledge, the company was able to make a lot of changes, including offering more training for the customer service representatives and improvements in how the upper management communicated with the department.

“Sales doubled the next year and quadrupled over three years," Justin says.

4. Make customer relations a top priority.

Bob Shoyhet is currently the CFO of Melillo Consulting, a Somerset, New Jersey-based business that specializes in IT expertise. But a business Shoyhet worked for previously had a problem with losing customers, some of them big accounts.

“Not unlike a long-lasting marriage, after a while we began to take certain aspects of the relationship for granted," Shoyhet says. “The owner started checking in with our customers less than before, worried less about giving them the best discount because they were dependent on us and felt comfortable buying from us and we got content with knowledge that our account manager had a good relationship with the customer."

Then his boss realized that revenue for the last year was down 10 percent. With that truth in front of them, the company began doing annual pricing reviews of their competitors to make sure they were in the same ballpark.

“We also gave our customers a report on our findings, which no one did for customers, no one," Shoyet says. "We stood out, earned credibility and a reputation for doing what is best for the customer."

The company started making sure that multiple people had relationships with their clients. Besides the account manager, both the owner and/or the sales manager had to see the customer at least once every two months. They also started fostering personal relationships, he says.

“This became priority number one," Shoyet explains. "We invited customers to company events, ballgames, dinners, for no other reason than to just to say hello. We kept those meetings personal. No business talk unless customers initiated it."

Sure, that may not work for you if you have, say, an online store or some brick-and-mortar stores where you hopefully have dozens or hundreds of customers coming in every day. Yet even there something can be done. After all, that's why rewards programs have caught on with so many retail, service and hospitality franchises, in which discounts are offered to loyal customers. Whether you have a handful of clients or a steady stream of consumers you'll never get to know well, let them know that they're appreciated.

5. Address any perception problems your company may have. 

Maybe your website has some grammar errors that are making customers wonder if they can trust you. Maybe your facilities are dirty and disorganized. If customers start associating your company with careless errors, they might start thinking that paying for your products or services will only buy trouble.

If you're not clear what your perception problem could be, consider offering a customer surveys as a way to uncover the issue.

Sometimes you don't need customer surveys to get to the root of the problem. Black Dog Logistics, a shipping service in Stevensville, Maryland, hasn't had a mass exodus of customers. But its owner Cindie King admits that they've lost or nearly lost clients.

"We deal with many issues on a daily basis that are not in our control, like traffic, driver's attitudes [or] equipment malfunction, which can make it a challenge to excel," she says.

King recalls one instance in which a bigwig client lost his cool when a driver showed up to deliver expensive equipment to a medical company in flip flops, "and without the required pallet jack for off-loading," she adds.

Making matters more frustrating, this driver didn't work for King but was an employee for another transportation company.

King worked hard to smooth things over. She made sure the driver was presentable and prepared by the time he left with the equipment. She says that over time, her company regained the client's trust.

Something will go wrong at some point. That's inevitable, King says. You may even have something go wrong where you start losing customers. But King says that the best way to prevent customers from leaving—and to retain a client or patron who you think is going to bolt—is to be near perfect all of the other times. 

Your goal, she says, is to make sure that "the customer has many warm, fuzzy feelings in doing business with you before there is a mistake. This builds trust and loyalty, and it's enhanced when problems are addressed honestly, quickly and always to the customer's satisfaction."

Read more articles on customer relations.

Photo: iStock