We all know you can’t please everyone – the one thing that attracts some customers to your business will be the very thing that drives others to shop elsewhere. But when a regular customer stops doing business with you, alarm bells should go off. It could point to a dive in the quality of your product or customer service – an issue that, if not fixed quickly, will lead to more and more people taking their business elsewhere.
The other reason why losing a regular is a problem is that returning customers generally spend more when they shop with you. Studies show that revenue from repeat business can be as much as seven times higher per visit than a single purchase from a new customer.1 This means that to replace the income gained from one regular you initially need to entice seven new people to shop with you, and this of course means money spent on advertising.
If dealt with properly, however, the loss of a regular can help you make improvements to the way you run your business, and in some instances can be reversed to once again secure that customer’s long-term engagement with your brand. Follow these steps as part of your plan if somebody breaks your business heart.
If you find yourself in a situation where a once-loyal customer has stopped shopping with you, the first rule is to stay calm and keep a level view of what has happened. It’s worthwhile to be open to the reasons the customer left. There is strength in seeing where your weaknesses lie.
Measure the loss
Not all customers are equal. Even though many regulars do spend more per visit, you’ll never know what you’ve lost unless you quantify it. For online businesses, this is as easy as reviewing the customer’s purchase history in your e-commerce software. Smaller, real-world sellers, however, may have to be more creative. Staff in a cafe, for example, will usually remember a regular’s order and the frequency of their visits.
Once you have a better idea of the lost revenue, you’ll know how much of a hit you’ve taken and how much new business you need in order to get back to where you were.
Sometimes a customer will just vanish – it may even be a few weeks before you notice their absence. A regular may contact you to communicate the reasons why they are taking their business elsewhere. This is obviously a much more desirable situation to be in, not only because it eliminates guesswork, but also because it gives you a chance to try and win the customer back.
Once again, don’t get defensive. Acknowledge your shortfalls and suggest ways you can instantly make improvements. It may be worthwhile offering an incentive such as a one-off discount to make up for a bad experience. The key is to be quick in your response. Surveys on customer experience show that 50 per cent of consumers will give a brand only a week to respond to an enquiry before moving to a competitor.2
The good news is that people become more confident in your business when they feel like you are listening to them, and that many negative experiences can be turned around with a good response. Simply acknowledging a complaint will please 46 per cent of consumers, and will influence nearly a quarter of people to post a positive review online.2 If you can turn a major complaint into a good review, you’ll be winning in business.
Learn from the experience
It is possible that a regular may never return. If this is the case, the only thing you can do is to learn from the experience to ensure it doesn’t happen again. Think of it as a good chance to review your products and practices, especially customer service, and make changes where they are needed.
Losing a regular may be the kind of wake-up call that stops your business stagnating and propels it to the top.
1 The ROI from Marketing to Existing Online Customers, Adobe, 2013.
2 2011 Customer Experience Impact Report, Oracle, 2012.
This article represents the views of the author only and not those of American Express.
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