Take the Assessment
Connect with Jane Out of the Box
Study results show women business owners fit into one of five categories. Take our assessment and discover which Jane you are today! Knowing could change your life and your business.
Subscribe to the See Jane Succeed newsletter
The Best of Jane – Five Lessons for Handling the Loss of a Customer
Posted on July 16, 2009 - Filed Under Jane Thoughts, Success Tips for Jane
Now that we’ve examined how the five types of female entrepreneurs might respond to losing a client, this article takes away the best of each type to come up with a step-by-step action plan for what to do when you face this situation.
1. Find out what happened
Whenever you lose a customer, it’s a good idea to attempt to learn what happened. Customers leave for a variety of reasons – many of which are their own and have little or nothing to do with your product, service, or business. However, by having a systemized “exit” interview that you always send to lost customers, you can gain insight that might, over time, help your business improve.
Let’s say, for example, that your customer left because they felt they didn’t need your product/service any longer. You might ask them what they are doing now instead. If there’s a new strategy they are now employing, maybe there’s room for you to create a “next level” product or service or some kind of continuity program that carries them to the next stage of development when they feel “finished” with what they have purchased from you.
Let’s say they went to a competitor. Why did they leave? By tracking this over time you can see if there are patterns. Is it nearly always a pricing issue? (If so, you may need to review your pricing structure, consider pricing bundles that give discounts for bigger purchases, and/or find ways to better communicate the value you offer.) Is it frequently a service issue? (If so, this may lead you to understanding some operational changes that might improve your business.)
Several Janes are great at systems, and as a researcher, this is a system I highly recommend because it gives you important insight into your business. These can be as easy to implement as a ‘pop-under’ survey on your website when someone un-subscribes, to as personal as a phone call follow-up asking for the information so you can learn how to strengthen your business. Which method is right depends on how many customers you have and the rate at which they “churn”.
However, it’s important to remember, too, that you can’t (and shouldn’t try) to be all things to all people. That is why I tell all of my consulting clients two essential messages about understanding the results of this kind of research:
- The customer is not always right. Sometimes customers leave because they aren’t a good fit for your business – and that’s OK. Listen for the opportunities that fit your business model and philosophies and let go of rude feedback and/or feedback that really doesn’t make sense for your business model.
- Unless at least 10% of your customers are saying the same problems exist, you really don’t have a problem. What you’re looking for is patterns that help you get smarter and easy-to-implement systems that make sense. If, however, you find that more than 10% of your exit interviews are saying the same thing – it’s time to pay some real attention because you’re leaving money on the table.
Note that both of these in essence say, “Listen to them, but be true to yourself.” Feedback is just that – feedback. Take what serves you and leave the rest.
2. Misunderstanding – or Service Problem?
If the loss is caused by a misunderstanding or service problem and you have had a good relationship in the past, see if you can close the gap
We would never recommend you try to “rescue” bad customers. You know the type – the person who is never satisfied, always complaining, always trying to get you to lower your price, and/or takes up too much of your time. In fact, I’d often recommend looking at your customer list and “releasing” these people on a regular basis to free up your energy to work with people who do appreciate you!
That said, though, if the departing customer is someone you’ve had a positive or lengthy relationship with, consider the feedback they give you. Is there some way to close the gap and retain them? Perhaps there was a simple misunderstanding and once that is cleared up, trust is rebuilt. Perhaps there was an unfortunate error but you have a chance to “make good” on it by offering them something of value or by communicating what you’d do differently next time. Obviously, before attempting this you need to make sure the customer is worth the effort and that you feel you really can do something for him/her to make things better.
3. Let go gracefully.
Debbie Ruiz shared her perspective on our blog (thanks, Debbie!), and her advice for handling customer losses is dead on. She said, “I would…let the customer know if they’re not satisfied with their new products or service I will still be here and they’ll be welcome to come back.”
We’re all smart enough to know that it doesn’t do any good to argue with the customer or try to convince someone to buy something they don’t want. Being graceful means doing our best to help the other person feel good about their decision, even if it appears not to be in our favor at the moment. As Debbie suggests, it’s entirely possible the customer might come back someday. I’ve personally had this happen more than once, when a client has been “sold” really hard by an enthusiastic competitor who later, couldn’t deliver on their promises. Be graceful – don’t burn the bridge.
4. Don’t take it personally.
Ultimately, whether you agree with your customer’s decisions or not, whether their reasons seem valid or not, their decision isn’t about YOU – it’s about them. Keep it that way by refusing to take their decision personally.
I’ve interviewed women entrepreneurs who’ve taken such a loss personally and seen that manifest for them in two ways. There’s pride – which results in a “Fine! Go! See if I care!” and there’s self-judgment, “I must not be very good. They don’t like me. I’ll never succeed.”
Neither of these cases reflects reality. Remember that the decision isn’t about you – it’s about them. They may be afraid to spend the money. They may feel they don’t need what you offer. They may feel they’ll get a better result if they buy from someone else. Regardless of their reason, it’s not about you.
Which takes me back to the 10% rule I mentioned earlier. Unless at least 10% of your customers have the same complaint, it’s probably not worth the effort to create changes in your business based on the feedback. But, even if 10% of your customers DO complain about price, instead of making it about you, make your response about them. Don’t say, “I don’t know how to make money at a lower price,” or “Forget them, I don’t need them.” Instead, say to yourself, “My customers really think they need lower prices. What can I offer them at a lower price, or how can I increase their perceived value, in a way that works for my business.”
5. Implement the right changes and monitor what happens
Building (and maintaining) a successful business is something you need to keep refining and improving on. It’s never “done” and it’s never “perfect”. Instead, periodically review the feedback you get in an aggregate form and look for those patterns. Make the changes that make sense to you and that seem like they’ll have a worthwhile payout. And then, draw a line and start looking at how the results differ after you make those changes. Have you started retaining more customers? Have the reasons changed over time? By periodically reviewing this feedback, you should find good ideas for making modest (or major) changes that will help your business grow.
Leave a Reply
©2010 Jane Out of the Box, All Rights Reserved.
