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6 Major Reasons Customers Switch Companies Or Products

Written on the 27 September 2016 by Charles Allen

Have you ever experienced the loss of a major client or customer? If you haven't then congratulations. However, if you are in business long enough, it will eventually happen to most of us. I know it has happened to me on more than one occasion. We learn from it and move on. These 6 reasons apply to almost any type of business, online or offline. I will break down in percentages why customers change products or companies.

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1 - Negativity. When you customer experiences a negative situation from the representative or customer service, this reflects badly on the company and everyone involved. If your customers needs aren't addressed promptly with the proper approach you have a lost customer waiting to happen. Statistics say 68% of customers switched products or companies due to negativity in dealing with issues.

2 - Unresolved Complaints. Indifference towards a customer and their complaints will result in a customer going elsewhere for their product or service. When the proper effort is not displayed to resolve a customer complaint a lack of respect is shown to that particular customer. When you are in a leadership position, make sure complaints aren't ignored but rather dealt with efficiently and properly. If these complaints aren't resolved promptly, you will lose a customer. So deal with complaints as they arise. Statistics show 17% of customers switched products or companies due to unresolved complaints. If these complaints are dealt with promptly, you may save 17% of your customers. That's a highly significant number that is within your control.

3 - Price. When a customer changes companies or products due to price, this shows a lack of value exhibited for your product or a lack of a good business relationship with your customer. In my opinion, for me to switch products or companies based on a marginal price difference is nominal assuming I have excellent customer service and a good working relationship. On the other hand, if I am purchasing in bulk (10,000 widgets with a $1 price difference) this price variance becomes highly significant and has to be addressed for the sake of the bottom line. Statistics show that 6% of customers change products or companies due to price. If you build great value in your product, a slight price variance form your nearest competitor can be justified. The benefit from your product is far greater than the competitor, and your price is justified.

4 - Buying From Relatives. You know the 'ole saying, 'Blood is thicker than water'. Well it applies in business as well. Statistics show that 5% of customers change products or companies due to buying from relatives. This reason is practically beyond your control. This is just a part of doing business and you have to live with it.

5 - Relocation or Moved. When a company changes its physical location you may lose a customer. I know I like to keep my business locally, so if I relocate to a different city or state, I am more apt to do business with local companies. Statistics show only 3% of customers change products or companies due to relocation.

6 - Death. Only 1% of customers are involved in this category. Death is inevitable and cannot be controlled. When death occurs to a customer or a major purchaser, a shake-up within that customer or company inevitable results in a change in where they purchase their products or if they purchase at all.

So, statistically speaking the 100% breakdown in why we lose customers looks like this:

68% from negativity; 17% from unresolved complaints; 6% from price; 5% from purchasing from relatives; 3% from relocation; and 1% from death.

What can you learn from this? Spend most of your time (80%) on issues 1 & 2, and your business will prosper.


Chris Doe Ford - whether your business is offline or online, or both, we all want to retain our customers. For more information and to engage in training to retain more of your customers please visit my homepage at http://selfhelpishere.com

Author: Charles Allen
About: Zoom In Business Media & Technical Support.
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