Customer Experience News & Trends

Why new customers defect — and how to keep them

One big problem shows up time and time again when customers are asked why they quit shortly after signing up.

More than two-thirds of new customer defections are caused by indifferent or unhelpful responses from salespeople when complaints develop, according to a Forum Corp study. Compared to the two-thirds of customers defecting over poor response, the study found that only 14% of new customers defected because of poor product quality.

Four criteria

Customers are primarily concerned about response in four areas,  according to the survey:

  1. How quickly initial contact with the salesperson is established after problems develop. Customer problems, even minor ones, require instant acknowledgement, even before possible solutions are offered. Many complaints or problems can’t be solved on the initial call. An instantaneous confirmation that the customer’s complaint has been received is the first critical step in an effective response process. When customers send messages and don’t receive confirmation that they have been heard, they may turn to competitors. Salespeople who ignore or respond too slowly to customer complaints send a negative message. Customers feel that if a salesperson can’t be reached early in the relationship, what will it be like later, when some things are taken for granted?
  2. Whether salespeople accept personal responsibility for the complaint resolution. They don’t blame engineering, manufacturing, shipping or anyone else in their company. They take it upon themselves to follow through with the customer, even when other people are needed to reach a resolution. They avoid making statements like, “I’ll get right on that and call you back.” A statement like that doesn’t answer critical questions, such as:  When will the salesperson return? What is being done? When will the problem be resolved? Customers want to know what the salesperson plans to do, how long it should take, and the resolution they can expect.
  3. The quality of the salesperson’s response. Preparation is the key to an effective, timely response. A poorly framed response may be more frustrating and stress-producing to new customers than no response at all. There are three components of preparation related to customer response. The first is identifying the kinds of complaints new customers typically make. The second is the job of gathering the information, materials and resources needed to respond to standard customer complaints. The third is framing the response to specific customer complaints as they arrive. Preparation means offering a game plan. Customers don’t expect all their complaints to be resolved in a single phone call. They do expect the salesperson to confirm the complaint and recognize the need for a resolution. The best salespeople have a series of questions ready to identify probable causes and begin the resolution process.
  4. How the salesperson provides confirmation and feedback. When the customer complaint is resolved, the best salespeople confirm that their customers have received the solutions they expected. These salespeople get customer feedback regarding the origins and causes of their requests and the execution of the response. They use this information to improve their own complaint resolution strategies and provide feedback to their companies to prevent future problems.

Adapted from Achieve Sales Excellence by Howard Stevens & Theodore Kinni (Platinum Press, Avon, MA). Mr. Stevens is chairman and CEO of the HR Chally Group, a leading sales development firm. Mr. Kinni is a business author and journalist.

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