No amount of data analysis will tell you why. If you compare their history with others who are still active, nothing seems amiss. They just stopped buying.
The good news is that there is a reason. The challenge is finding the one that applies to individual customers. The top five reasons customers stop buying are:
- Neglect – Customers are like a garden. They need care. You have to let them know that you appreciate them. Individually. If you treat your customers like a number, they will treat you like a price tag. The first time they find a better price somewhere else, they’re gone.
- Boredom – If your messages and merchandise rarely change, you’re infecting your customers with Ho-hum-itis. They get so bored that they stop following your social media activity, reading your emails, flipping through your catalogs, and buying.
- Overload – Too much is just too much. Sending emails every day or multiple times a day, catalogs every three weeks, and blasting social media messages desensitizes your customers. They shut you out because they are overwhelmed. Even if you offer the perfect item at the perfect price, they won’t see it because they’ve zoned out.
- Alienation – Some customers get alienated without complaining. They may receive a low quality item and keep it because the return process is too challenging. Or, they may read a social media post that offends them. Or, they may encounter one of your employees on a bad day. The list could go on forever.
- Lifestyle – Changes in lifestyle account for a small percentage of your customer attrition. When your products or services stop meeting their needs, customers stop buying. This is a natural transition.
Reducing your attrition rate requires three steps.
First, you have to measure it on a regular basis. If you monitor the size of your active customer database without drilling down to acquisition and attrition, you are missing a critical piece of the puzzle. You may be replacing valuable customers with hit-and-run buyers.
Next, you have to determine why your customers are leaving. This is the most challenging step because your database may not contain the information. You may have to contact them individually to find the problems. It is an investment in time and resources that will have a good return if you correct the issues.
Finally, you have to fix the problems. When you do, you will find that your customers are more responsive and loyal. And, your company has more opportunities.