Losing customers is bad for your business. It implies that you've not done enough to retain your customers or that your products are in fact, sub-par. It can also damage your brand, especially when customers decide to vent their frustration all over social media (I'm referring to Netflix's customers).
Not sure how your customers are slowly slipping away? We've listed 7 ways you could be losing your customers and solutions to get them back.
1. Service, service, inconsistent service
You operate in a service-based sector so the quality of service should be your top priority. It also shouldn't be a surprise when I point out that inconsistent service is the number one way to lose your customers.
Think about this. Say customer A receives a great experience and recommends you to customer B. However, customer B has a terrible experience and complains about it to A. Customer A will now feel bad for recommending a terrible experience. You end up losing 2 customers, and gain 2 people telling their friends not to book with you.
Yes, this actually happens. I've been on tours where my guide lost his cool and began complaining about other customers during the tour. This is not only incredibly unprofessional, it also ruins the fun holiday experience everyone else paid for.
There's a fine line between being friendly and unprofessional - complaining on the job definitely crosses that line.
3. When reality doesn't meet expectations
A customer's perception of your business is built through your marketing and advertising efforts. Each method of promotion communicates little bits of information about your product to your customers, and that builds their perception and expectation of your company.
At the end of the day, the expectations you promise affects how customers perceive value delivered. How value derived from a "budget youth traveller" experience will differ greatly from "a family fun-filled holiday".
Your business loses customers when there is a disconnect between perceived expectations and the delivered experience.
4. Pricing your products wrongly
Pricing can be a tricky especially since it affects other crucial aspects of your business such as your profit margins, your returns on investments and your competitiveness in the market. Pricing also forms part of the perception or image you are building for your products, company and brand.
Price your products too high and you end up having to satisfy delusional expectations. Price yourself too low and you end up positioning your product somewhere along Lidl's discount aisle. You lose customers when your pricing strategy does not reflect your product offering.
A good rule of thumb is to find out where your competitors are pricing themselves at, come up with a price range and figure out where your product best sits in that range. Check out this article I previously wrote about pricing strategies tour and activity companies can use.
5. Advancing competition
You lose customers when the value you deliver is inferior to that of your competitors, this could be perceived or real value. It doesn't matter. This is likely to happen if you don't stay on top of your game. Business owners need to keep an eye out on what their competitors are doing at all times, and create a long term strategy to remain competitive in the market.
6. Not resolving problems quickly
It is important to develop a team that can handle problems quickly and professionally. If a tour doesn't go as planned or if an activity is cancelled because of poor weather, your guides need to have the freedom and authority to offer appropriate compensation. This could be a refund or rescheduling the tour for another day.
Tourism businesses need to remember that their customers have spent a lot of their money, time and energy planning their holidays, and they want it to be everything they dreamed of (and a little bit more). The last thing they want is to have their holidays ruined because your employees cannot or do not know how to resolve a problem efficiently.
7. Not listening to your customers
70% of people trust reviews from people they don't know. This means that 7 out of 10 customers reading a review about you on TripAdvisor or Yelp or some other review platform is likely to take those comments into consideration, especially the negative ones, decreasing your chance to secure a booking.
If you don't respond to reviews online, online spectators can interpret your silence as a disregard for your customers' satisfaction and no one wants to spend their holiday with someone who doesn't listen to them. Talk about a sure fire way to lose your customers.
So, what can you do? Focus on:
What does excellent service mean? Some people claim it is a matter of delivering an adequate level of service that fulfills the needs of the customers, while others claim that it's a matter of going above and beyond to "knock the socks off your customers". From a business' point of view, excellent service is the ability to consistently deliver the same quality of service again and again and again. Proper training and guidelines should be provided so that your employees know what standards you want them to adhere to.
To maintain consistency, you should incorporate channels for feedback after your tours and activities to monitor your performance. You could send a post-trip email with a short Google Form or a link to TripAdvisor for customers to leave you a review. It is also a great avenue for you to listen to your customers and find out how to work on areas for improvement.
Speaking of feedback, you need to be able to respond to feedback professionally, whether positive or negative. Creating open channels for communication where you can build trust between you and your customer is important for building a relationship with them and keeping them.
The keyword here is trust. Make sure that the content you post on social media or the things you say to your customers over the phone help you to gain your customer's trust. Keeping communication professional at all times is a great way to start.
Building the right team is crucial to your business' success. Be selective about who you hire, fire and partner with. Make sure your suppliers understand the values of your company and share them too.
Developing your team is also important. Think about the behaviours and attitudes you value and reward employees who demonstrate them consistently. At the end of the day, a service-based company relies greatly on its staff. People book tours and activities with you not because of your product, but because of the people delivering those products.
Sometimes, it's just a matter of falling off a customer's radar. Keeping in touch with them is a great way to remind them about your services. It could be as simple as sending them an email once a month, updating them about the different products you offer, or telling them about the new and exciting things your destination now boasts. You could even include a "limited time only" discount code to entice old customers back to booking a tour or activity with you.
Any other tips on how to stop businesses from losing customers? Let us know in the comments below!
To build a relationship with your customers, you first need to understand them. Download our free ebook and learn about key global trends from 2018.