Posted in Customer Service, Shopper Marketing

The science of losing customers

Why do dissatisfied customers stay and satisfied customers go?

 

This is a partial cross-post from my Inside Retailing column. But I add a few additional insights that would not be appropriate in that forum: here I can say whatever I like…

Have you ever vowed not to shop a certain store – only to return some time later, hoping no one notices or asks?

Have you ever wondered why satisfied customers really hang around? Or, conversely have you wondered why dissatisfied customers don’t always leave?

Seiders et al conducted research (Journal of Marketing paper, Vol 69, 2005) into customer satisfaction, including a longitudinal study (over a long period of time) and established a few major drivers of customer visitation behaviour.

They distinguished between actual behaviours as well as reported intent. (And yes, customers don’t always do what they say they will do.)

They determined that there were four factors that influenced actual behaviour:

  1. Convenience
  2. Competition
  3. Cash (Household Income)
  4. Customer involvement

If you study this list of factors carefully, you will note that there is only one of these factors that are fully in your control on a day to day basis.

Can you spot which one it is?

It is customer involvement, of course; because all the other elements are ‘external factors’ and therefore by definition not controllable. (Initial choice of location is one element of convenience, but it is relatively difficult to change anyway.)

 

This would mean different things in different businesses.

So it stands to reason that we have two simple choices to make:

  1. Rely on our luck (a competitor closes down, a bus stop in front of the store) and hope for the best.
  2. We can figure out how to create an engaging customer experience.

What will it be for you?

Of course, customers want different degrees of involvement. It is worth noting that none of the following qualify as customer involvement:

  • Smiling very brightly,
  • Greeting the customers in the friendliest possible way
  • Giving the customer a bag for their purchases
  • Giving the customer a discount for buying
  • Asking the customer to join your loyalty club

Most retailers (and even consultants) think that the answer is better customer service.

It is NOT.

Customer service is a cost of entry. Many retailers who are currently being punished in the perfect storm of global financial hardships, growth in eCommerce and changing consumer habits deserve to be punished.

It is sad. It gives me no pleasure to say it. But really, how long can you expect the customers to hang in there when your service sucks?

Good service won’t win them back.

The game has changed. Forever.

Yuu now have to figure out how you change your business model to deliver a customer experience that will win over customers again.

If you are interested in understanding the difference between customer service and customer experience, you can go to town HERE. (Normally it’s reserved for subscribers only, but this is too important to keep behind the wall.)

 

 

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