What Causes Customers to Run to Your Competitor

What Causes Customers to Run to Your Competitor

06 Nov, 2023

Churn - it’s every marketer’s worst nightmare. It’s what happens when customers, who are notoriously fickle with their loyalties, leave eventually for your competitor.  If you've experienced this, it's probably not specifically about your company. Every company experiences churn. 

Customers are easy to lose, and that's just a fact of marketing. Today, experts estimate that out of 26 unhappy customers, only one will complain directly to your company. The rest will simply leave. This may lead you to wonder what you're doing wrong, why your customers are leaving for your competition, and how you can improve your level of customer service. 

If you're asking these questions, you're not alone. This post is designed to help you understand how to retain customers, why they leave, and what you can do to stop at the whole churn cycle.

Why Customers Leave: 5 Things That Send Them Through Your Competitor’s Door

While some amount of churn is random, owing largely to customers in decision or preferences, lots of churn can be prevented. The first step is to understand why it happens. 

With this in mind, here are the five most common reasons that customers churn in today's environment:

1. You Play Favorites

We get it, it makes sense to pay the most attention to your loyal, returning customers. Those customers are worth more, and it's easier to sell to them. Despite this, though, you don't ruin returning clients by neglecting ones coming to your company for the first time. If you do this, customers will catch on -- if they feel like you're playing favorites with your more established customers, they are simply going to leave. 

With this in mind, focus on customer service. Often salespeople don't share enough information with them, leading to frustration that makes them want to take their business elsewhere. Once this happens, you're in a deep, deep hole. It takes an average of 12 positive customer-service experiences to make up for a single negative experience. 

With this in mind, it's clear you've got to start treating all your customers equally. Instead of rewarding loyal clients for expected behavior, change your focus to nurture new clients as well. When you pay full attention to both pursuits, you have a better chance of creating a more balanced client base.

2. You Make Things Inconvenient

Customers love convenience. When you make working with your company inconvenient, it's not going to fly. We live in times in which virtually everything can be had within 2 days, and for free. It's clear that offering an inconvenient or clunky sales process will just earn your abandonment. 

Therefore, focus on making your buyer's journey as simple and streamlined as possible. If you can examine your sales pipeline and identify where you're losing customers, you'll be able to find a way to resolve the pain point and retain business. 

3. Your Wait Times are Too Long

If you work in retail, it's likely that you still have a checkout counter somewhere. While checkout counters allow you an opportunity to interact face-to-face with your customers and create a real relationship, they can also be a serious liability. 

Today, 86% of customers will leave a store if the line to check out is too long. So it's time to start asking if you have developed a line management system for your retail business. If you haven't, now is the time to start thinking about why, and how to build one. 

The answer may lie in building more check-out stations, hiring more staff, or adopting a technology-based waiting-line management system, which can also be helpful.

4. You’re Not Innovating

Customers today get bored. Who can blame them? There's so much to look at in today's retail environment. Modern customers have the option of choosing from countless companies, products, marketing schemes, checkout options, and more. There are dozens of ways for them to get the things they want. 

Because of this, your company can either innovate or sink. If you're offering customers the same old products, goods, and services they're used to and finding you're experiencing a lot of churn, the answer might be that you're not innovating enough. 

Innovation isn't something that you can plateau on. It requires constant maintenance and a close attention to detail. Once you've done it once, you need to keep redoing it, adjusting it to your customers, and ensuring its scaling with your business. The process goes on forever. 

To ensure that innovation is as efficient and targeted as possible, identify a couple of common pain points in your business. Next get your team to put their heads together to find new ways to route around the issue and provide better service for both employees and customers.

5. Your Competition is Just...Better

Nobody wants to hear this, but sometimes customers leave because your competition offers a better product or service. In this case, it's time to put your feelings and offensiveness aside, and figure out what action you can take as a result. 

While every founder wants to think of their company as the best on the block, this isn't always true. The great news is that you can use this as a lesson. Do some research and analysis, such as:

  • What is your competition doing that you're not?
  • How can you mimic or improve upon their offerings?
  • Are they paying attention to customers in a way that you aren't, but should be? 

Thinking about these things won't make you any weaker as a company, it will only help to improve your offerings and make you more aware of your surroundings. If you're not sure what your consumers like about your competition, consider sending an email survey to past customers. Their feedback might be hard to read, but it will certainly be illuminating.

Keeping Customers in Your Store

Although there's no way to retain 100% of your customers 100% of the time, there are ways to reduce churn in your organization and ensure that the customers that you worked hard to earn stay where they belong. But improving your customer service, taking lessons from your competition, and understanding how you can treat each customer equally and compassionately, will improve the offerings of your organization, and ensure that you are building long, happy customer to client relationships.

Let us know how we can help you: