3 Reasons Why Retail Businesses Are Losing Customers
Customers are one of the base pillars that hold any retail business together. Without them, it crumbles, which is why you must keep them from leaving.
Research shows that 87 percent of customers hop from one business to the other when shopping, only 13 percent are loyal to one brand, and another 58 percent completely switched to a different brand after experiencing dissatisfaction one time.
This means that whether you're aware of it or not, your retail business is likely experiencing some degree of churn.
To fix this, you need to first understand what you're doing wrong, why your customers are leaving, and what you can do about it. Addressing these issues helps you improve customer retention and loyalty, win over new prospects, and positively impact revenue generation and profitability.
Poor Customer Experience and Support
It's normal to have an unsatisfied customer once in a while. You can't always please everyone. How you deal with your customers’ concerns will determine whether they'll stick around or bolt.
If you're not constantly offering great service, paying better attention to them, using the fastest and most convenient processes to resolve issues as they arise, you're bound to lose customers.
Whether you're running a physical or online store, you must do everything in your power to streamline your buyer's journey. Convenience is the key.
For one negative customer experience, it will take 12 positive experiences to make up for that. It's easier to keep customer frustrations from arising than to rectify a negative situation.
U.S. companies lose $41 billion a year to bad customer experience. To avoid contributing to this figure, define what a great customer experience and service mean to your buyers, then create policies around them to guide your customer interactions.
Are your wait times too long? Is your site difficult to navigate? Are there poor or slow response efforts for disgruntled customers? Are you prioritizing some customers over others? Are your staff failing to answer your customers' questions?
Inspect your business and figure out problem areas — i.e., the issues that are complicating the way customers experience your service — and then take steps to improve upon them.
Not Being Up-to-Date With Trends, Competition, and Market Demand
Every day, innovative ideas are ushered into the marketplace. To ensure continuous business survival, you need to stay ahead of the pack.
Adapt to changing trends in market demand, consumer behavior and technology. Monitor your competitors. Incorporate their winning tactics into your business strategy and take advantage of the areas where they're underperforming.
These days, customers don't want to feel coerced into purchasing with every interaction they have with your brand. They will take their business elsewhere if you can't satisfy their needs. Therefore, take the following steps:
- Show how your product solves their pain points or needs.
- Foster a relationship founded on trust.
- Provide engaging, useful and valuable content they can turn to.
If you want to retain customers, you need to be a unique and better alternative to the competition. From your branding to marketing and communication, you must stand out.
There's never a time or place for complacency in business. You must keep introducing fresh solutions and incentives to win over your customers again and again.
Pay close attention to the changes in your industry and data derived from competitor analysis. Doing so will enable you to react timely enough to stop hemorrhaging customers.
Inconsistent Product Offerings
Another reason why retail businesses lose customers is the inability to consistently meet their needs.
All businesses have principal products or services that make up the core of the brand. However, these can be taken for granted as the company expands into newer markets or takes on additional services.
This neglect can lead you to lose some of your customer base. When buyers come to your store and can't find what they want, they get disappointed and try elsewhere.
The next time they need the same thing, they might bypass your business completely and head for the brand that met their needs the last time.
As a retailer, you probably can't afford to stock an endless list of products, but you can optimize your inventory to satisfy demand as much as possible. Good inventory management provides insights into sales trends as well as high-demand and low-selling products, helping you make informed decisions about what stock to keep and what should be discontinued.
This brings the two-fold benefit of creating a wonderful shopping experience for customers and promoting retail sales for your business.
Customers are the lifeblood of any business. You don't have to wait for sales figures to drop before you start plugging the leaks in your retail strategy.
By paying attention to customer satisfaction, product pricing and value, product assortment, market trends, and the competition, you can keep your customers happy and loyal to your brand for a long time.
Joe Peters is a Baltimore-based freelance writer and an ultimate techie. When he's not working his magic as a marketing consultant, this incurable tech junkie devours the news on the latest gadgets and binge-watches his favorite TV shows. Follow him on @bmorepeters.
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