Home Entrepreneurship What CEO’s Don’t Know About Lost Customers

What CEO’s Don’t Know About Lost Customers

by Guest Writter
Chip R. Bell, author, The 9½ Principles of Innovative Service

Organizations struggle to unravel the real reasons their valued customers leave.  Most gather explanations as a customer closes an account.  What they learn is almost always a tiny glimpse at a misleading symptom and almost never the accurate diagnosis of the true issue. For example, customers rarely leave because of price, changing needs, or poor quality.  Customer insights come from methods that unearth the truth rather than a conflict-avoiding excuse.  Customer forensics® is the deliberate study of the accurate reasons customers leave.  While demographics and psychographics can spotlight broad themes, customer forensics provides more precise tools helpful in learning the complex emotional and social architecture behind an exit verdict.

Most customer departure is driven less about a single event and more about a combination of factors that ultimately reach a tipping point.  The spark that ignites exodus could be anything—a fee increase, a perceived drop in quality, or frontline rudeness.  Yet, it only provokes exit because other factors have gradually increased the customer’s interest in switching providers.  Since switching requires effort and a potential disruption of operation, it is more likely it requires a series of negatives that finally bring the customer into the “zone of indifference.”  Once in that zone, customers only need a trigger to push them into actively plotting and/or initiating their departure. So, what are the less obvious reasons customers enter the zone of indifference?  Three reasons include customer fog, customer fit and indifference.

Customer Fog:  The Anxiety of Dissonance

Fog suggests confusion—that murky feeling of uncertainty.  It could be a trust-busting message like the recorded message: “Your call is very important to us.  Your approximate wait time is 30 minutes!” It could create sensory dissonance much like a dirty restaurant bathroom creates unease about the food.  Or it could be values dissonance like the reaction to a merchant who dramatically raises the price of critical items during a disaster.  As customers, our perceptions can take us way beyond what we observe to what we conclude.  When those conclusions leave us anxious about the outcome, the message to a service provider is irrefutable:  be a constant guardian of the details and symbols that impact customer’s perceptions.

Customer Fit:  The Discomfort of “I No Longer Belong”

A large credit card processing company sold its retail customers on the promise of quick access to a call center operator should there ever be a glitch at the retailer’s point of sale.  To sweeten the deal, the sales person provided his or her personal number for easy access. As the company grew, their call center did not add staff to handle the increase in customers.  The back-up plan failed since sales people, now scrambling to sell new customers to cover the unexpected departure of unhappy ones, were unable to provide frustrated customers with the access they were promised. Customers felt betrayed and communicated to researchers they no longer felt the processing company was a good fit for their needs.  Key lesson?  Find out what factors drive customer loyalty and never compromise on those factors.  And, never make a promise you cannot or do not keep.

Chopped Liver:  The Pain of Indifference

Customers today are entertained and over stimulated by sensory overload.  They are multi-taskers who can shop, check emails, and talk on the phone at the same time.  They expect service with a cherry on top.  It means the standards for a memorable experience have rapidly risen.  Indifferent service is not tolerated; ho hum service earns you a lost customer seeking a more engaging experience.  And, when customers encounter sleepwalking frontline employees who seem preoccupied with quitting time, they interpret it as the organization’s disinterest in taking their money.  Solution:  Treat old customers with the same attention you give new ones.  Assume your service experience is an attraction and find ways to excite your customer’s senses.  Engage employees just like you want them to engage customers.

Customer learning is a never-ending effort.  Customer expectations are not only continually changing, they are also constantly increasing. A crucial part of customer learning is the intelligence gained from those customers who leave.  Such insights can inform improvements that prevent unwanted customer churn.  As the old Polish adage goes:  “A guest sees more in an hour than a host sees in a year.”  Insider blindness can be reversed by viewing customer experiences with the understandings obtained from those who have departed.


About the Author

Chip R. Bell is a customer forensics consultant, renowned keynote speaker and the author of several best-selling books.  His newest book is The 9½ Principles of Innovative Service.  He can be reached at www.chipbell.com.  

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