10 Reasons for Losing Customers (+ How to Prevent)
Key points
- Clients leave due to poor communication, unfulfilled expectations, and lack of value, among other reasons.
- To prevent clients from leaving, agencies should focus on building strong relationships, setting clear expectations, and continuously delivering value.
- Some strategies to improve client retention include being proactive in communication, regularly assessing and addressing client needs, and taking action on client feedback.
Losing customers can have many different reasons. The main ones are a poor service or product, subpar customer service, or price increases.
Whichever the reason, as a company, seeing the number of customers dwindle can feel especially personal. After all, your business model is partially based on building and maintaining strong relationships with the people you work with.
When a client leaves, it can be easy to second-guess yourself, your worth and the value you provide. More often than not, there are common contributing factors that—if fixed—can help reduce your client churn.
Let’s take a look at the top 10 reasons why your business might start losing customers and what you can do about it to fix your client retention.
1) You’re defined by poor customer service
When a client enters into a partnership with your company, they’re doing so because they believe you can provide them with value. But they also expect you to be responsive when it comes to your product or service.
The trouble is that many companies are good at selling, when it comes to providing customer support, they fall short, though. It’s unclear who to contact, how long response times are, and what to do when you want to switch to a different service.
Ideally, your business should have procedures in place to educate new customers, for instance:
a visible contact form for general requests
a knowledge base for frequently asked questions
a point of contact to switch services/products
By making it clear to your customers where and how to get help, you take a lot of work off your team’s shoulders.
2) Your value proposition is not convincing
This point goes hand-in-hand with the previous one. Providing value to your clients is only half (okay, maybe three-quarters) of the battle. You also need to make sure you’re effectively communicating that value back to them on a regular basis.
If you don’t, you run the risk of your clients assuming that you aren’t actually doing anything for them—which obviously isn’t good for business. Make sure you’re sending your clients regular reports that detail the progress you’re making on their behalf. And when you do have news to share (good or bad), make sure you communicate it to them in a timely manner.
SPP makes it easy to track your progress and communicate it back to your clients—all through your client portal.
Customers can log in to view the status of their orders though custom status tags and track KPIs through embedded Google Data Studio reports from services like:
BrightLocal
SemRush
Moz
Google Data Studio
Plus, SPP allows you to reach out to clients from directly within the portal, meaning it’s incredibly easy to shoot off a quick update email.
3) You don’t set realistic expectations
When taking on a new client, it’s important to set realistic expectations from the get-go. If you set the bar too high, you’re setting yourself up for failure (no matter how much value you provide). But if you set it too low, your clients might not see the value in what you’re offering them.
The best way to manage expectations is to under-promise (to an extent) and over-deliver. This way, your clients will always be pleasantly surprised by the results you achieve for them—and they’ll be more likely to stick around for the long haul.
Additionally, it’s essential to think about managing expectations at every stage of your sales funnel.
Make sure good habits and practices are baked into everything you do, including:
Pricing pages: Don’t try to trick people into signing up for your services with low introductory prices that will skyrocket after the first month. Be upfront about what they can expect to pay.
Service descriptions: Don’t make grandiose promises about what your services can achieve. Be specific and realistic in your descriptions.
Sales processes: Don’t make false promises about how quickly you can deliver results. Be honest about the timeline, so your clients know what to expect.
Onboarding processes: Don’t leave your clients in the dark during the onboarding process. Make sure you keep them updated on your progress and what they need to do to prepare for the work you’ll be doing.
In short, be as transparent as possible with your clients at all times. This way, there will be no surprises—and your clients will know exactly what to expect from working with you.
4) You’re not giving your clients enough attention
Your clients are (or should be) your number one priority. But sometimes, agencies get so caught up in trying to attract new business that they forget to focus on the clients they already have.
Make sure you’re staying in regular contact with your clients and proactively addressing any issues or concerns they might have. If a client feels like they’re being ignored, it’s only a matter of time before they take their business elsewhere.
SPP makes it easy to give clients the attention they need through automatically generated client accounts within your SPP portal. Logging in gives clients a direct line of contact with your company thanks to the helpdesk module.
5) You’re not responsive enough
As a business, you need to be responsive—to both your clients and inquiries from leads. If you’re not, you’re going to lose out.
The solution here is simple: make sure you’re responsive!
This means returning phone calls and emails in a timely manner, being available to meet (virtually or in-person) when your clients need you, and generally just being there when they need you.
If you’re not sure how responsive your company is, why not put it to the test? Do mock tests with your team, pretending to be a new client or potential lead. See how long it takes for someone to get back to you, and take note of the experience you have. Then, make the necessary changes to ensure that your real clients have a better experience.
6) You’re not listening
If you’re not listening to your clients, you’re not going to be able to give them what they want—and they’ll eventually take their business elsewhere. It can be easy to get caught up in our own agendas and forget to listen to what our clients are saying. But if we want to have a great customer experience, it’s essential that we make the effort to really hear them out.
Grow your industry knowledge
Make sure you’re really listening to your clients when they talk to you. This means being present in the conversation (both mentally and physically), taking time to understand their needs, and being open to feedback (even if it’s negative).
With SPP, it’s easy to hear your clients out thanks to endlessly customizable intake and order forms. You can add fields for every bit of information you need, and even require that certain fields be completed before an order can be placed.
All the information you collect is automatically entered into client profiles that you can access anytime you need a refresher.
7) You’re not being proactive
In today’s world, things move quickly. And if you’re not being proactive, you’re going to get left behind.
Being proactive means being on the forefront of change, anticipating your clients’ needs, and always being one step ahead. It can be a lot to keep up with, but it’s essential if you want to maintain a competitive edge.
There are a few ways you can make sure you’re being proactive:
Stay up-to-date on industry news and trends.
Regularly check in with your clients to see how their businesses are doing and what changes they might need from you.
Conduct market research to see what new services or products you could be offering your clients.
Proactive companies are the ones that thrive—so make sure you’re one of them!
8) You’re not flexible enough
In today’s ever-changing business landscape, it’s more important than ever to be flexible. Clients need businesses that are able to pivot quickly and adapt to their changing needs.
If you’re not flexible, you’re going to have a hard time keeping up with the competition. To be truly successful, you need to be able to change and grow with your clients.
So what does being flexible look like? There are a few key things:
Being open to change: This one is pretty self-explanatory. If you’re not open to making changes, you’re not going to be able to adapt to your clients’ needs.
Being adaptable: Being flexible means being adaptable. This means being able to quickly learn new things and apply them in a way that benefits your clients through concrete changes.
Being agile: Finally, being flexible means building an agile business—one that’s not only open and able to change, but one that’s able to make changes quickly and seamlessly.
If want your company to be successful, you need to make sure you’re flexible. It’s not always easy, but it’s essential in today’s ever-changing business landscape.
9) You’re not human enough
I know this sounds silly, but hear me out!
Clients are looking for companies that feel like partners—not vendors. Most want to work with people, not faceless corporations. That means you need to be making an effort to humanize your business.
Humanizing it means making your client-facing experiences and interactions personable, approachable, and relatable. It means making an effort to connect with your clients on a personal level. And it’s something that can make all the difference when it comes to client retention.
So how can you make sure you’re being human enough? Here are a few tips:
Make an effort to get to know your clients—not just their business, but also their goals, their values, and what they’re passionate about.
Be genuine in your interactions—clients can spot a fake from a mile away.
Be responsive—not just to requests for proposals or project updates, but also to things like emails and phone calls.
Have a visible public image—Last but not least, having a strong social media presence indicates that there is a level of accountability attached to the quality of your services. After all, people talk, and unhappy customers will most likely recount their negative experience to their friends and colleagues.
Making an effort to be more human can be a challenge, but it’s one that’s worth pursuing if you want to keep your clients happy.
10) Your price increases are unjustified
If you’re losing customers after a recent price increase, think about the entire process. How did you communicate the price increase, and was it justified? Is the value of your service or product still clear?
If you hope to grow your business purely by increasing prices regularly, you might find out that your customer base will shrink so much that the remaining clients cannot make up the lost revenue.
Here are a few tips to make the entire journey safer for your company and your clients:
Re-framing your value prosposition is important when it comes to announcing price increases. You could either remind customers of your value, or add a simple new feature that they might find valuable.
Be transparent about the new pricing by giving customers clear reasons as to why you had to increase them. For instance, the tools and servers you’re using are 20% more expensive, so running your product is more expensive for you as well.
Ensure the new pricing switch is smooth and doesn’t disrupt day-to-day business. Nothing is more concerning than finding out that some customers were switched to the new pricing, but others not. If everyone is to be switched to the new pricing, do it all at once.
Start making changes to stop losing customers
Losing a customer from time to time is inevitable. But that doesn’t mean you have to sit back and accept it. If you’ve lost customers, it’s time to take a close look at your business and see where you can make changes.
Use this list as a starting point—and don’t be afraid to get creative. The most important thing is that you’re taking action to prevent further client loss.
And if you’re looking for a client portal tool that can help you improve communication and collaboration with your clients, be sure to check out Service Provider Pro (SPP). Our software is designed to help agencies streamline their workflows and deliver better results—all while keeping their customers happy.