I was recently hired as a keynote speaker to talk to a group of financial advisors about client service. One of the topics of the meeting was a discussion about why a client would leave. The most obvious reason might be that the financial advisor gave bad advice, and the client lost money. But let’s assume the advisor is smart, the advice is sound, and the return on investment meets expectations. Even with all of that, why would a client leave?
The answer wasn’t as obvious. I did further research to confirm. Even if the advisor hits the financial goals, the relationship may not be strong enough to retain the client without an adequate level of communication. So one word, communication, is the answer. Without the right amount of communication, the client – even if they are happy with the financial return – could be wooed away by a competitor.
That made me wonder about the reasons good companies lose customers. I don’t think there’s a company on the planet that can please every customer every time, although that’s a lofty goal and the theme of one of my books, Amaze Every Customer Every Time. It’s unrealistic to think you could retain 100% of your customers forever. So, with that in mind, I made a list of why customers leave despite a good product and customer experience:
- Price Sensitivity: Our annual customer service research (sponsored by RingCentral) found that 51% of customers say the service experience is more important than price. That leaves 49% of customers who could potentially be swayed by price. For them, you may not have to have the lowest price, but you should at least be competitive.
- Better Offers: This is more than the price. This is about a promotion or bundle that has enough perceived value to pull away existing customers. An example could be the loss leaders some companies use to steal customers away from their competitors.
- Convenience: Is your competitor more convenient than you are? Did they just build a location that’s closer to your customer? Did they extend their business hours? What do they do that makes doing business with them more convenient?
- Loyalty to an Employee: There are some instances in which the relationship isn’t between a customer and the company but between a customer and an amazing employee. If that employee moves to the competition, they may take the customer. Or if your amazing employee retires, the customer may be open to doing business with your competition.
- They Have Something You Don’t: This is a tough one to beat. If the competition offers a product or service you don’t, you risk losing your customer.
Like most articles and videos I create with lists, these aren’t the only ideas to consider. But they will serve as a good conversation starter. So, sit down with your team and brainstorm the answer to the question, “Why would a customer leave us?” And once you know, do something about it!
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