Losing a customer to another vendor can be incredibly frustrating, especially after you’ve invested so much money, time and effort to close the deal in the first place. Sometimes the reason they’re leaving you will be obvious, but at others, you may be left scratching your head.
If your first thought is that it must be down to price, then look more closely. Contrary to popular belief, the cost is not the be-all-and-end-all when it comes to buyers and their decision making. If a buyer has chosen to switch supplier, then their decision often won’t have been financially motivated (although finding a good deal elsewhere may have made it even more appealing).
Making a change of this nature can be a major headache, which means a buyer must deem the issue they’re having far outweighs the hassle of cutting all ties. For example, if a company constantly fails to stick to their promised delivery times and this causes disruption to the business, then no reduction in price is ever going to remedy that. As soon as the customer finds a better deal from someone else, the contract will be lost.
The good news is, there are two sides to the coin. If you work hard to provide a great product, excellent customer service and always deliver on your promises, then you could be the one stepping in to take over.
So, what are the two key triggers most likely to be the cause of a customer’s departure?
Negative business impact – poor service delivery
As the previous example demonstrates, if you make mistakes and it causes issues for your customer, it will hurt them and damage your relationship. Ideally, you’ll prevent any of this from happening long before work ever begins.
You need to fully understand the business impact that your service will have for them. This isn’t always going to be easy, especially if there are multiple stakeholders and decision-makers involved, but it’s important.
Try and explore ways to drive open and transparent communication with your client. This will help you unearth any issues and aid you in working together to solve them. Also, agree on a comprehensive SLA (service level agreement) and make sure you hold each other to it.
Negative business impact – lack of improvement
Your customer may be looking for specific improvements that you simply cannot offer and this may have a negative effect on their bottom line. It’s one thing to solve a company’s pain point with your product or service but it’s quite another to help them bring about improvements. If you can find ways to achieve this, you’ll be on to a winner. Again, it may not be easy to pinpoint how to do this, especially if it’s hidden away in strategic decisions that aren’t openly discussed, but you need to try and uncover it.
The main point is, you should be aiming to provide a strategic, mutually beneficial relationship. Unless the product you’re selling is strictly based on transactional relationships, always strive to offer more. If you’re helping drive their business forward, you’ll become a key asset.
Depending on the nature of your product and how easy it is to leave you and go with a competitor, the decision to switch may be easy or more difficult. Besides the two key reasons we’ve just mentioned, here are some other issues to consider:
Avoid expectation mismatch
If a customer thinks they’ll be getting ‘ABC’, but you actually deliver ‘XYZ’, they’re not going to be happy. The way to avoid this happening is to talk through their expectations with them from the start and make sure they are realistic. If you fail to discuss all the details beforehand, you’ll be setting yourself up for a potential loss, as well as damage to your reputation. The secret is to never break your promises. Instead, under-promise and over-deliver.
Provide added value
Make sure you’re offering added value – i.e. that it is more beneficial for the client to work with you than just relying on the product alone. This will make it far more difficult to leave you. For example, think about providing educational material, such as a ‘customer learning zone’ on your website, or facilitate a user group. It’s what comes with a service that often matters and will help you stand out. You should be aiming to become a trusted advisor because then there’ll be no reason for them to consider jumping ship.
Maintain the relationship
What are you doing in terms of building a relationship with your clients? Once you’ve closed the deal, do you simply wish them good luck and move on to the next lead, or do you stay in touch and keep working at the relationship? In today’s tough economy, when you’re faced with global competition, you won’t last long by focusing all your efforts on simply making sales. You need to continue nurturing and building links with clients and making sure they stay happy. This could be as simple as using email marketing campaigns, or as elaborate as hosting customer in-person events. Decide what will be most appropriate and go for it.
Are there any cross-sell, or up-sell opportunities you could pursue? Keep clients engaged by talking to them about other products and services that would benefit them.
Never stop improving customer service
This should be a no-brainer. Whatever needs to be done to keep customers happy, get on and do it! Continuously look for ways to improve or enhance your service and delivery. Invest in training and development where it is needed.
Business, technology, tactics…they’re all constantly evolving and if you’re not moving with the times you’ll quickly fall behind. Innovation is a must if you are to continuously improve your proposition. Encourage and embrace it and it will help you deliver a better service to your customers.
Review your cost structure
Could you make any revisions to your pricing structure that would be mutually beneficial? This will be an important point if costs come up in your negotiations. Sometimes a change in conditions is all that is needed to help keep a relationship going. Don’t stretch yourself too thinly, but equally be willing to put something on the table to make it work.
Have first-class communication
How well do you communicate with your clients? Does everyone know who to talk to, and about what? Is everything clear on both sides? Do you have regular meetings just to check-in and see how things are going? This could prove key to uncovering any dissatisfaction they are feeling early on. It can be hard to stay on top of this type of activity, especially when you’re under pressure and have other things to do, but it could be crucial.
If you are faced with a customer leaving you for another vendor, then make sure you sit down and fully analyze the situation. Asking yourself strategic questions:
- what happened?
- why did it happen?
- what worked?
- what didn’t?
- what needed to happen differently?
- what have you learnt going forward?
If you do this diligently enough, it will help you avoid a similar fate next time around.
Customer experience is the magic word here. A positive experience needs to start long before a deal is made and then continue long after. Every aspect of the business is involved in this, from your website, to how your sales reps conduct themselves, how your customer service people deal with requests and issues, delivery and the accounting department.
Rather than having departments work in isolation, you need them working together to create one seamless experience from start to finish. That’s always going to be the most effective way to generate new customers, retain them and grow your business.