What to do when customers stop buying from you

Nancy has been operating a business supplying office equipment and stationery to small firms for five years. Her business has been declining gradually until it sunk to the lowest this year. She attributed this to high competition.

One day she did simple analysis of her situation with a friend and realized that her assumptions are all wrong. She ruled out competition since other players who came after her are doing well.

She realized that her biggest problem is she has been losing many customers and hardly getting new ones. She was encouraging to note that the few customers she has are buying more than they used when she started.

Loss of customer in business is called customer attrition, churn, turnover or defection. It occurs when customers leave you for some considerable period of time or for good.

Basically, it is impossible to keep all customers for life due to natural and market realities. We have two types of attrition – voluntary and non voluntary. Voluntary attrition occurs when a customer leaves the services of one company and adopt another offering the same or similar services.

Involuntary attrition occurs when loyal and satisfied customers leave due to reasons such as relocation, inability to use the services due to age, health or death.

There is nothing a company can do to prevent involuntary attrition. This can be sorted only by aggressively marketing to get new customers to replace the lost ones.

Non voluntary attrition can be controlled by knowing why customers leave or are likely to leave and addressing the concerned issues.

Essentially most customers leave when they are not happy with the services or a new competitor comes with better offering. Few leave for adventure or inability to afford when fortunes change.

Preventing customer attrition is a major headache to many firms because in the first place getting a customer is very expensive. Some firms only make profit after a customer has purchased a number of times.

There are several strategies of ensuring customers stay long in enough but they can all be summed up to good customer service and ensuring customers get value for money.

Do not take customers for granted, especially if they are loyal and don’t complain. Always keep asking them and figuring out how you can give them better service and ensure they get maximum value for their money.

Pay attention to customer complaints no matter how small or trivial they appear. Customer complaints are just tips of an iceberg. Various studies show that approximately 96 percent of unhappy customers don’t complain, and 91 percent of those will simply leave and never come back. Be proactive and prompt customers to tell you their experience.

Nevertheless, don’t get complacent in good times and forget to prospect and scout for new customers. With changing lifestyles and preferences and many options in the market, some customers are hard to hold customers for long. Keep getting new ones to replace those who leave.

Mr Kiunga is a business trainer and the author of The Art of Entrepreneurship: Strategies to Succeed in a Competitive Market. [email protected].