We all lose customers at some point. It’s a fact of life. That’s not to say we have to stand idly by and wave them goodbye; we need to understand why this is happening and identify what changes can be made to prevent it.
In the following paragraph, we will discuss some general cause of losing the client and the actions you should take to address the issue.
1.Service /product quality not meeting client’s expectation.
Almost every business has some dissatisfied customers. A lot of reasons might cause customer dissatisfaction. For example, the change of key business person, over promise by sales person/ advertisement, or poor quality control for services and products rendered.
Whenever possible, the owner should always seek opportunities to get client’s feedback. Do not feel embarrassed to ask feedback from a dissatisfied customer. Customer feedback can help you improve the business. And it also shows that you care about the client, thus giving you an opportunity to rebuild the destroyed relationship.
You operate a family owned liquor shop, and the business is always prospering. Suddenly you realize Dan Murphy is opening a new store in your local shopping center. Then you should not expect not losing customers. Price competition has become heavier these days with the rising of online shopping and the giant chain stores. Small business owners should be prepared to face price competition.
Though you should not expect all clients to have loyalty to you, there are couple things you can do to offset the impact of price competition. You need to be an expert on what you are doing/selling. Your ability to provide tailored service/ product is always a great add on to your service/ product. The quality client will be happy to stay with you even if you do not guarantee the lowest price. And try put your knowledge into marketing content(blog, brochure, YouTube, etc.) You will be surprised how efficient this low-cost marketing strategy is.
3.Insufficient marketing or over Advertising
How many times you walk pass a bread shop whose name is “bread shop”? Would you be impressed by their name? Remember your brand is an important tool to attract client. If your competitor is doing much better than you on branding, you might have to accept the fact that you provide better quality service/ product but no one recognize them.
On the other hand, try to avoid over branding. An excellent marketing campaign may bring you some new customers. But once they get disappointed by your service/product, the bad name is going to broadcast itself.
4. Changed economy/ business environment
A lot of people think there is nothing you can do under these circumstances. “What can you do if people just do not spend money?” My suggestion is you need to look at this from another aspect: “If my customers stop spending, why should I?” We always ask clients to review their operation when their business is not working. quite often, we can identify some bad behaviors in client’s operation. For example, not able to make redundancy decision when the business experience significant difficulties, keep buying new stocks but fail to sale the old stocks. Invest in new equipment without forecasting future cash flow. And worst of all, continue operating a business that is not able to make money without thinking the exit strategy.
When you identify the inefficiency in operation, taking prompt actions to rectify the issue is crucial for business success. I will discuss these problems in detail in my next blog. But If you need to talk to a business recovery specialist, please feel free to contact me to discuss solutions to your unique situation.