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Breaking Down Customer Attrition: Why They Leave and How to Keep Them Engaged

Breaking Down Customer Attrition

Customer attrition is a major issue for businesses of all sizes. When customers leave, it can affect sales, customer loyalty, and your company’s overall reputation. That’s why it’s important to understand why customers leave and how to keep them engaged. Let’s take a closer look at customer attrition and explore why customers leave, what can be done to prevent it, and how to keep them engaged. By taking the time to understand the causes and effects of customer attrition, businesses can take proactive steps to reduce customer attrition and create a more loyal customer base.

Customer Attrition

Customer attrition, also known as customer churn or customer turnover, is the loss of customers over a specific period. This can be a major concern for businesses of all sizes as it can affect the company’s profitability and growth in the long run.

Why Customers Leave

Customer attrition is a constant challenge for any business. Losing customers means losing revenue and potentially damaging your brand’s reputation. It’s important to understand why customers leave so you can address the issues and prevent it.

In our April 2023 speaker event, Roger Harrop shared, in his presentation “Electrify Your Profitability”, some of the top reasons customers leave:

1% – Die or are Insolvent: Unfortunately, there isn’t much you can do with this reason a customer leaves. However, it’s worth reviewing your processes to ensure you handle these situations with compassion and empathy.

3% – Move Away: Again, this reason is largely outside of your control. However, you could consider offering relocation incentives to retain customers who are moving out of your area.

5% – Influenced Away (by your competitors): Your competitors are always trying to attract your customers. If they offer a better product, pricing or customer service, your customers will be tempted to switch.

9% – Get a Better Offer (from your competitors): Similarly, customers may leave for a better offer from your competitors. This could be in the form of lower pricing, additional features or better service.

14% – Because of an Unresolved Conflict: It is six times cheaper to get an old customer back than acquiring a new customer. Unresolved conflicts can be a major factor in customer attrition. It’s essential to handle any complaints or issues promptly and professionally.

68% – Perceived Indifference: The vast majority of customers leave due to perceived indifference. Customers want to feel valued and appreciated, and if they feel neglected or ignored, they will take their business elsewhere.

Understanding why customers leave is essential for reducing turnover and keeping your business profitable. While some reasons are outside of your control, there are many things you can do to address customer concerns and improve their overall experience with your brand.

How to Keep Customers Engaged

Keeping customers engaged is a crucial aspect of running a successful business. Engaged customers are more likely to make repeat purchases and become loyal advocates for your brand. So, how can you keep your customers engaged? Here are some solutions and actions to correct attrition Roger Harrop shared:

1. Visit Them: One of the best ways to keep customers engaged is to visit them in person. This is especially important if they have recently had a negative experience with your business. By visiting them and listening to their grievances, you can show that you care about their experience and are willing to do what it takes to make things right.

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2. Apologize: Even if you did nothing wrong, apologizing to your customers can go a long way in keeping them engaged. A simple apology can show that you understand their frustration and are committed to resolving the issue.

3. Demonstrate They Are Valued: Providing customers with a guarantee or warranty can be a powerful way to show that you value their business. By offering these assurances, you can give your customers the peace of mind they need to make repeat purchases.

4. Make Small Gestures: Small gestures, such as a handwritten thank you note or a personalized gift, can make a big impact on customer engagement. These gestures show that you are willing to go above and beyond to make your customers happy.

5. Resell Them: Offering a “trial order” or a special promotion can be a great way to bring former customers back into the fold. Make it a priority for every salesperson to bring back former clients every year.

6. Schedule Frequent “Non-Sales” Calls: While it’s important to stay in touch with customers, it’s also important not to come across as too salesy. Scheduling frequent “non-sales” calls can be a great way to keep your customers engaged without pushing them to make a purchase.

7. Keep Customers Informed: Finally, it’s important to make sure that your customers know everything that you do. Keeping them informed about new products, services, or promotions can help keep them engaged and interested in your brand.

The Bottom Line – Keep Your Business Growing

As Roger Harrop shared with us, understanding customer attrition and the reasons behind it is essential for businesses looking to stay ahead in a competitive marketplace. From a lack of engagement to poor customer service, there are several factors that can lead to customers leaving. However, by implementing effective strategies to keep customers engaged, businesses can prevent attrition and keep their customer base strong.

At the end of the day, keeping your business growing requires a proactive approach to customer retention. By staying vigilant and always seeking out new ways to keep your customers happy, you can create a strong foundation for long-term growth and success. Remember, retaining existing customers is much more cost-effective than acquiring new ones, so it’s in your best interest to prioritize retention and make it a core part of your business strategy.

Best regards,

Jamie Ramerini

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