Customer fog: Why your customers leave
Photo by iStock.com
The worth of customer retention compared to the cost of customer acquisition has been thoroughly studied. Depending on the nature of the business, the cost to acquire a new customer can be five to ten times the cost of keeping an existing customer. Yet, customer forensics®--the understanding of the true reasons customers leave an organization — remains largely completely misunderstood.
Most organizations direct their investigation at the tipping point of the customer exit. Exit interviews as customers close accounts or post-service surveys ask, "why are you leaving us" or "why did you leave us." It reminds me of a story about a friend whose wife finally bid him farewell and filed for divorce. When I asked him why his wife of several years had left him, he said, "Well, she told me it was because I wouldn't take out the trash!" The corollary in the business world is the all-to-familiar: "Your prices are too high."
Tipping point study is as erroneous as accepting that garbage duty would cause a divorce. It might be evidence of "the last straw," but unless a single act is extremely egregious, the impetus to leave started long before the slamming door. At some point much earlier in the relationship — whether spouse or customer — the person entered the “zone of indifference” and consciously or unconsciously began considering a change.
There are many reasons customers enter the “wandering eye” stance. One reason is customer dissonance or customer "fog." Fog suggests confusion—that murky feeling of uncertainty and emotional discord. There are three types of customer dissonance — cognitive, sensory and values.
Cognitive dissonance is produced by conflicting messages. A sign saying, “Ignore this sign” would be a simple illustration. A more familiar one would be the recorded message we have all heard: "Your call is very important to us. Your approximate wait time is 30 minutes!" Such foggy messaging will cause customers to experience distrust putting them on the hunt for other suspicious evidence of unreliability. It suggests wise organizations look for conflicting signals that spell anxiety to their customers.
Sensory dissonance is less about illogical communication and more about sensory cues that make customers feel uneasy. A bus driver with obvious alcohol breath is not just about the driver’s personal habits. A nurse with dirty hands says more to a patient than simply untidy hygiene. The dirty bathroom at a restaurant creates unease about the food. As customers, our perceptions can take us way beyond what we observe to what we conclude. And, when those conclusions leave us anxious about the outcome, the message to a service provider is irrefutable: be a constant guardian of the details that impact customers' perceptions.
Values dissonance is a subtle message of unfairness. The world of commerce operates on the assumption of fair play — a reasonable and rational exchange of value for value, e.g., funds for products or services. For example, when merchants dramatically raise the price of critical items during a disaster, most customers, while acknowledging the right of that merchant to play the supply and demand card, view it as unfair and an affront to their values. When the hassle of purchase exceeds the benefit of the purchase or when there appear to be hidden rules of disclaimer, it all spells aversion to customers. They begin to search for a change in the relationship. It suggests organizations examine those practices that reflect elusive forms of customer discrimination.
Great service is clear and unambiguous to customers. Customers seek relationships that reflect harmony and congruence. In challenging economic times, their antenna for discord and dissatisfaction is raised unusually high. When customers' experiences begin to be foggy, creating internal dissonance to customers, it triggers an unease that, left unchecked, leads to indifference and a readiness for exit.
Most customer departure is driven less about a single event and more about a combination of factors that ultimately reach a tipping point. The spark that ignites exit might be a price increase, a perceived drop in quality, or frontline rudeness or indifference. Yet it only works because other factors have gradually increased customers’ interest in switching providers. Since switching requires effort and a potential disruption of operation, it is more likely it requires a series of negatives that finally brings customers into the “zone of indifference." Once in that zone, customers only need a trigger to push them into the "zone of abandonment" where they actively plot and/or initiate their exit move.
A few months after my friend and his wife parted ways, I saw her briefly in the shopping mall. "Sorry, to hear about you and Tom," were my words that started the conversation. "I know,"” she said sadly. "It had been brewing for a long time. It could have been completely avoided. I finally got sick and tired of everything being 'all about Tom.'"
Customers on the verge of departure will rationalize their exit by viewing the service provider as being, "all about Acme." They may tell you about "not taking out the trash" as they close their account, but it is highly likely their departure "had been brewing for a long time and could have been completely avoided."
Note: Customer forensics® is a registered trademark of Chip R. Bell.
Chip R. Bell is a renowned keynote speaker and author of several best-selling books including Take Their Breath Away, Sprinkles: Creating Awesome Experiences through Innovative Service and Kaleidoscope: Delivering Innovative Service That Sparkles. He can be reached at chipbell.com.www