What do you do if you’re losing customers?

The first and most important question is: What is happening to the size of your target market?  If the market size is shrinking, then you may need to rethink your target market.

The second most important question is: What have the customers started spending their money on?  In other words, are their needs still the same but a competitor has a better perceived value proposition OR have target customers’ needs or priority of needs changed?

Let’s assume market size and customer needs are not the issue.

Then you need to further hone in on customers’ perceptions:

  • Why are potential customers making one of three potential decisions? Why have they not bought from anyone? Why have they not bought from you?  Why have they not bought from your competition? or from your competition?
  • Why are your current and past customers making one of three potential decisions? Why did they buy from you?  Why are they staying with you?

There are two ways to understand customer perceptions:

  • Analytics can provide insights into customer behaviours and actions (e.g. who are customers buying from). You need to get deeper understanding – why are customers making decisions?
  • Listening to them can provide you with the underlying reasons for actions and behaviours. Customer decision-making is both emotional (trust, brand, fashion, etc.), and rational.  Emotions often drive decision-making.

It is hard to listen to customers.  The 2017 Edelman Trust survey for Canada showed only 36% of respondents believe companies listened to customers.  It is far easier to make assumptions and guesses as to what customers are thinking, rather than focusing on the “words out of their mouths” as well as behaviours and actions.

There are two ways to listen to customers:

  • Passively – what customers ask and tell you in person; via emails they send; via questions, reviews and comments on your website or other social media; what they talk about when contacting customer service, etc.
  • Actively – you proactively engage with your customers, e.g. one-on-one interviews, focus groups, surveys, etc.

The single most important question to ask the target customer is “Who would you recommend?”

Your understanding of the customer results in quantitative and subjective metrics.

You now have some understanding of why you’re losing customers.  What sorts of changes are you going to make to people, processes and technology in order to impact the decisions made by current and potential customers?  The business case will identify both the value of the changes as well as the costs.

So far you have been addressing an urgent issue – the short-term loss of customers and immediate plans to address this issue.  Now you can step back at look at the longer-term issue. How will you ensure you won’t get into this situation again?

  • How will you understand your customers better than the competition does?
  • How will your customers perceive they receive a better value proposition from you rather than from your competitors?
  • What changes do you need to make to your board of directors, advisory board and C-suite?
  • What other changes are required to people, processes and technology?

To enable discussion with your board of directors, advisory board and management, download the following one-page slide:

What do you do if you’re losing customers?

Do your customers understand you?

Over the past years my meetings with leaders always included discussion regarding their customers.  There has been a large variation in the degree to which they understand the customer and the degree to which customers understand the leader’s company. Not surprisingly, there seems to be a relationship between business success and the degree to which there is mutual understanding with the customers.

There are three areas to consider:

#1 Who are your target customers, today and in the future?

  • Have you written down who your target customers? What are the specific customer segments you are targeting?  What comprises the customers’ ecosystem?  Do you understand the relationship between users and people giving you money? e.g. Why do advertisers pay Google?  Because of the large number of users?  Because the users perceive Google as being the best search engine and best user experience?
  • What are the problems and opportunities they face? What is driving their problems and opportunities? What is the market size? Who are the competitors? What is your market share?

#2 How do your target customers perceive their current relationship with you?

  • Are your target customers aware of your company – or your competitors?
  • How engaged are your target customers? g. Are they reading your emails; going to your website; or meeting with you or going to your bricks and mortar stores.
  • How engaged are your target customers with the competition?
  • Are your target customers buying from you – or from your competitors? What products and services are they buying?  How much of their needs are being met?
  • What is the market size and potential for growth?

#3 Why do your target customers buy from you rather than from your competitors? Why are your target customers buying from competitors rather than you?  Do not make assumptions or guesses. What are the “words from their lips”?  What are the facts regarding their actions and behaviours?

  • Are your target customers aware that they have a problem or opportunity that you can help them with? Or do you have to educate and persuade the customers that they have a problem and what the value would be to solve the problem?
  • Do the customers perceive their needs as so urgent they are proactively seeking a solution? Or do you have to find the customers and persuade them to take action.
  • How do your target customers perceive interacting with your company versus the competition?
  • How is the customer experience better and different with your company rather than the competition?
  • What are your customers saying about your company? On social media? Who are the customers recommending?  What is the strength of your brand and reputation versus the competition?

To enable discussion with your board and management, download the following one-page slide:

Do your customers understand you?