Advice Forums Forums Business Strategy How do companies lose customers?

How do companies lose customers?

Advice Forums Forums Business Strategy How do companies lose customers?

This topic contains 1 reply, has 2 voices, and was last updated by  Mario 1 month, 3 weeks ago.

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  • #36

    verabado
    Participant

    How to avoid losing customers?

  • #75

    Mario
    Keymaster

    I would classify the non-successful retention of customers into:

    1. Lack of long-term vision
    2. Poor targeting
    3. Failing business model
    4. Poor job quality
    5. Lack of a USP
    6. Operational challenges

    Lack of long-term vision

    Onboarding a client should envision the long-term potential of the business relationship.

    The best deal you can cut is the one that maximizes the lifetime value of a customer.

    This could be handled in different ways — take retainers or support packages as an example. I’ve shared some examples in this video.

    Setting up the stage for a long-term game is important. Of course, you need to have a strategy in place, be it through your own products and services or via a network of referrals and other partners who can pick it up (with a kickback for you).

    Otherwise, you get the main job done. And that’s it. The client is gone. The next conversation will require half of the warm-up it took you to get there.

    Poor targeting

    Some customers aren’t suitable for long-term clients.

    If retaining them is crucial to you, make sure you vet them properly as early as possible.

    My core business is a tech agency. 95% of our work is retainer-based.

    We rarely take on one-off projects. Some leads are great, but it doesn’t fit the rest of our workflow, investing in R&D and business development for our committed partners.

    Consider how important long-term leads are for you — it’s just one way to do it.

    Failing business model

    I remember a lead calling me with a proposal for some subscription website.

    The idea wasn’t lucrative. We would have charged $20K for a somewhat standard build and he would have paid.

    However. His business model revolved around a $1/mo subscription. After 15min on the call, we went over the possibilities to make this venture profitable at all, i.e. collecting enough subscriptions at a little incentive for something that required hosting, content marketing, and some promotion.

    The business idea was weak by itself. It wouldn’t have been profitable.

    Realizing this as early as possible will allow you to work with businesses generating a positive ROI from your work.

    Poor job quality

    This one is a no-brainer. If the customer isn’t satisfied with the quality of work, retaining them would be a hard sell.

    It’s also related to the proper targeting. Your work may be suitable to SMBs but not enterprises. Or the other way around if you are too expensive, but this is a different game.

    Lack of a unique selling proposition

    What makes you unique?

    Convincing anyone to invest in you long-term is contingent on a niche skill.

    Competition can steal all of your customers if they have a better deal than yours.

    Positioning yourself as an expert in a certain community is important.

    Could be a unique skill set. Or a business acumen in a given industry, combined with a portfolio of success stories in this field.

    Leveraging your key skill is the added value to a fruitful business relationship.

    Operational challenges

    Communication issues. Lack of an established process.

    Delays.

    Tedious or unstable management over time.

    Other mistakes caused by the inefficient process management will contribute to killing a successful relationship in the long run.

    I would probably rank communication as #1. Great communicators can solve plenty of problematic cases and poor communicators can make an otherwise smooth journey a bitter one.

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