In the competitive landscape of local business, where every customer counts, it’s absolutely essential to keep your current customers. Loyal customers ensure that your business is profitable. Most small business owners can tell you many different ways to retain a departing customer, but not many examine the reason why they are losing the customer in the first place. So before we start saving customers, let first take a look and why we are losing them first. In this article on SmallBizClub.com, we found some steps to identify and save customers before they depart.

Why Do You Lose Customers?

From www.smallbizclub.com & Harry Kierbow: Why do you lose customers? Do you know? When you’re trying to get one more customer, it can be very helpful to know both what you’re doing right as well as what you might be able to improve on.

In any business, the customer has to come first. If you’re not providing value to your customers through your products and services, then any business will ultimately fail. Talking to customers is key to providing value. By talking to customers, you can find out what they like about your business, and where they find the value to be. But it’s just as important to talk to former customers. Satisfied customers might tell you a lot of positive things, but a customer you’ve lost can tell you a lot, too.

Today, customer retention should be priority-one. You’re in business to provide a service and a value; if you lose sight of that simple principle, and focus solely on profit, your small businesses just took a wrong turn. When customer service takes a back seat, customer retention will begin to decrease.  Although a steady supply of new customers is coming in, the profits seem to get thinner. The revenue that comes from existing customers is two thirds higher than revenue from new customers, due to the expense of acquiring those new customers (via advertising, etc).

So let’s focus on making sure current customers stay with us. Be good to your customers, treat them with respect, promptly reconcile any issues that come up, and ask for feedback.

Small Business Bonfire does a good job of explaining the top five ways a small business can lose customers.

The Top 5 Ways to Lose Your Customers

Via smallbusinessbonfire.com: We have assembled the ultimate, most foolproof plan that will decrease customer loyalty, drive clients away and make sure they never come back. 

1) Don’t invest in customer service. Probably the most concrete way to get rid of all those happy customers is to simply not invest in customer service at all. Focusing on repeat customers and word of mouth, each year Zappos invests more resources into its customer service than they do in any other area of their marketing mix. WHAT ARE THEY THINKING? They see it AS their “marketing”. Yet, obviously it doesn’t pay off, because they only received a minuscule 1.2 billion dollars when sold to mega-giant Amazon.

Zappos sees themselves as “a service company that just happens to sell shoes.” Their customer service is both a branding center and a place to generate word of mouth advertising. What has this done? Create customers who are “brand evangelists.” They are aiming to make customers feel great so they will come back. But who has time for that? Just don’t worry about your customer service so you won’t be left to worry with all those satisfied customers. Yuck.

To see all five ways to completely blow it, check out the full article here.

This article is a fun contrast to the normal view of how to keep your customers, making it a fun read while also containing some very useful information. If you do these five things, you will definitely have your customers running for the door. Many small business are run by a skeleton crews which are all wearing multiple hats, and when time is a commodity, it’s generally the customer service side of the business that gets the least amount of attention.

Sometimes poor customer service is not intended. Some business owners and managers simply don’t realize there is a problem. This is why obtaining customer feedback is so important. The knowledge gained through customer feedback can be helpful in a multitude in ways beyond customer retention. You are able to identify needs for upcoming promotions, find problems or pain points of customers earlier, and identify emerging trends.

Since we are talking about customer retention, let’s talk about how you can use feedback as a way to save customers. The value of knowing a problem exists as it happens, or shortly thereafter, presents us with the chance to rectify the issue and ease customer tension before it rises to a boiling point. With more and more customers turning to online local business directories as a source to vent complaints, stopping a problem in the quickest amount of time lessens the chance of having to deal with negative reviews, which can be harmful to your business. However, knowing what to do with the feedback is generally less of an issue than knowing how to get customer feedback.

How to Collect Customer Feedback 

Via smallbusinessbonfire.com: Here are some sample questions you could – and should – be asking your customers on a routine basis:

• How are you currently utilizing our service/product?
• What problem does our service/product solve, and how were you solving it before us?
• What are some of the important changes you’ve seen (in your business, life, etc.) because of our service/product?
• How much time/money is our service/product saving you?

This article makes some great points when it comes to collecting customer feedback. They present you with four questions of what a businesses should be asking on a regular basis, and different venues for customers to send this feedback. Their four easy to implement mediums (phone, webform, social media, and video) can be utilized today to reach out to your customers.

We can’t stress it enough: customer service will make or break your business. If you disagree, think about this article the next time you’ve been waiting on hold for an hour and a half to make a payment. One of the best ways to truly stand out in today’s complex and competitive marketplace is to truly consider the needs of your customers, and making customer service the foundation for your small business.