What do you think?
Do customers leave because they found a lower price elsewhere?
This may surprise you.
According to marketing research, price is NOT the number one
reason why customers leave.
Product dissatisfaction? According to a study by the Small
Business Administration, that is actually the number two reason.
Price ranked third and was the reason – according to the same SBA
study - that 9% of customers changed businesses. (Only 9 percent
of customers leave because of price!)
A recent survey by Customer Care Measurement & Consulting focused
on the most serious problems that consumers - across multiple
product categories - experienced in the last four years.
This is interesting.
The Number One Reason Why Customers Leave
There are many reasons, but the single biggest reason why
customers leave is the 2 C reason – Caring and Customer Service.
A study by RightNow Technologies shows that 73% of customers leave
because of poor customer service, while another by the Rockefeller
Corporation shows that 68% of customers leave because they think
that you do not care about them. And most never even tell a
company. So, what most of your customers really want is you being
caring and you providing good customer service.
When it comes to the question of why businesses lose customers,
the perception that members of the sales staff don’t care ranks as
the leading factor, according to a study of all types of small
businesses by the Small Business Administration (SBA).
Nearly 70% of those polled in the SBA study indicated that the
perception of a non-caring staffer led customers to leave and buy
from other businesses — by far the strongest response of six
factors. Product dissatisfaction ranked second, with 14% of those
Claes Fornell, Director of the University of Michigan’s National
Quality Research Center, which computes the customer satisfaction
index, blames the productivity trap. With companies looking to do
more with less labor or lower labor costs, customer service is one
of the areas that suffer.
Firms trim employees and/or training. Or they hire outside firms,
often with foreign call centers, to handle consumer complaints.
“It may be cheaper, but it’s not necessarily better,” Fornell
In a Rage
Nearly one in three customers say they have raised their voices at
customer service reps and nearly one in 10 say they have cursed at
them over the past year, according to this survey.
Saving Labor Costs but Losing Customers
To save on labor costs, many of America’s largest companies have
installed software that the industry calls Interactive Voice
Response (IVR) systems. Yet more than 90% of financial service
consumers say they don’t like these systems. Source:
They Want to be Heard
The survey by Customer Care Measurement & Consulting found that 62
percent of respondents to the survey just wanted to vent and tell
their side of the story to a customer service representative.
The largest group - 82% - wanted (no surprise) their product
repaired or a service problem fixed. 59% wanted an apology.
So, how can you win back a dissatisfied customer?
1. Apologize for the inconvenience (even if it wasn’t your fault).
2. Let the customer tell his/her side of the story. Let them
3. Tell them you will do everything possible to get the problem
fixed. Then do it.
4. Call the customer back to follow up and make sure the problem
was taken care of.
Human-to-human service is what people want.
If your company provides human-to-human (quality) service, you are
very fortunate. You are probably keeping your clients and
customers - and gaining new ones.
Ann Barr is a consultant and sales coach who has written eight
books on sales and marketing. Email Ann at
Ann@SellingSupplies.com Get a free E-book when you sign up
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