Tuesday, July 27, 2010

Does Losing a Customer Matter?

"There is nothing more vulnerable than entrenched success." - George Romney

When a company loses a customer, is it important to understand the reason?  Is business ever so good that it doesn't matter?  Although these seem like ridiculous questions, I've had a few instances lately where companies knew they lost me as a customer and did not ask me why I was taking my business elsewhere.

I recently switched my television service from one provider to another.  When I called to cancel my service, I was told how to return my equipment but never asked why I was canceling.

In another instance, the virus/spyware subscription for my computers was within a month of expiring and the developer, for some reason, decided to renew my subscription (and charge my credit card) without my consent.  I do not like this tactic and, after consistently using their product for several years, decided to call them to complain.  After being on hold for about ten minutes, the recording said that any product can be refunded via their website within thirty days of purchase.  I connected to a representative via the live chat link on their site, canceled my subscription, and asked for a refund.  I was given the refund but not asked why I canceled.

Do They Care?

When I thought about it, there were actually several similar instances over the last few years when a company knew I stopped doing business with them but did not ask why (e.g., newspaper subscription, internet service, web hosting, etc.).  The first thought that came to mind about these situations was that business is going so well for these companies that they truly don't care when they lose a customer.

Although this may be the case for some companies, I'm guessing that the most common reason for the apparent lack of concern over losing a customer is related to resources.  Companies are so thin these days, and, to keep costs down, call centers are so focused on meeting volume targets and time-per-call metrics that there is no time to ask customers why they are leaving.  Combined with the disconnect between marketing, sales, customer service, and quality, and the ability to collect - much less do anything with - the information becomes virtually impossible.

It's Important But Not Difficult

It's always important to know why a company loses a customer.  The companies referenced above were actually lucky because they knew I was leaving.  In most industries, it's difficult to know that a company is losing customers until business has dropped so much that it's difficult to turn things around.

It is absolutely critical - and not necessarily difficult - to know why customers are leaving, and the customer service representatives are in a great position to collect the information.  It should not take too long to ask the question, listen to the response, and check a box on the screen to classify the issue.  With little effort, a company can begin to collect extremely valuable data regarding trends and high-level issues that its customers are having.

Have companies like the ones mentioned above learned nothing from the experience of the U.S. automakers over the last 30 years or so?  No company is so successful that it can afford to lose touch with its customers.  Since the effort may take an extra one-to-three minutes of a call center agent's time, however, some companies may not see the value in such an exercise.  And to be honest, if the company is not going to take action in response to the data collected, they're probably right.

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