INFOGRAPHIC: Why Don’t Customers Come Back?
Remember that restaurant you went to last year for your friend’s birthday?
Have you been back?
Chances are, you probably haven’t. In fact, studies show that between 60-70% of customers will never return to a business they visited once.
But why? Surely we don’t hate 60-70% of the places we go to, right?
With thousands of business owners asking CityGro to help them improve retention and customer loyalty, we wanted to dive deeper into this question, asking a sample of American consumers what kept them from coming back.
There’s a huge upside to increasing this return rate, and — as the adage goes — if it’s not measured, it can’t be improved.
Details and Takeaways
“It was inconvenient.”
Whether they were vacationing, visiting a part of town foreign to their own or turned off by some other challenging factor, 6 percent of our respondents cited a lack of convenience as the most common reason keeping them from returning to a business they had previously visited.
With so many options and so little time, modern consumers hate inconvenience.
Clearly, when you’re opening up a business, try and pick a good location, with good parking if it’s needed.
After you’re up and running, though, there’s not much you can do to make large strides on the convenience front. Sufficient staffing, proper inventory — things like that can make a difference, but unless those elements are really bad right now, improving them might not move the needle in a significant way.
“I went somewhere else.”
These consumers — 13 percent of them, to be exact — simply elected to take their business elsewhere.
Perhaps these customers already had a favorite Italian spot, frozen yogurt shop or boutique. Maybe they like things a little less spicy, have different taste in fashion or prefer to shop online.
No hard feelings, it just wasn’t the right fit.
Forget about these customers.
Provided they didn’t have a negative experience (more on this in a minute), they simply found another place they’d rather be.
Is it possible to get them back? Yes. But chances are, it’s going to be pretty difficult — and pricey — to do it. Your time, money and effort are better directed elsewhere.
They’re gone. You can’t be everything to everyone, so don’t try.
“There wasn’t enough value.”
For 22 percent of the public, the decision to stay away was mainly based on an inability to meet their expectation of value — services provided compared to purchase price.
Pricing is a delicate game.
On the one hand, you want to keep prices up. Obviously it’s in your best interest to maximize profits.
On the other, however, high prices can scare customers off.
Don’t overthink this one — you’ve already set your pricing strategy. Whether you’re targeting low-, middle- or upper-class customers, your prices are pretty much where they’re going to be. If your product or service is good, you’ll find customers who want to pay for it.
Don’t be afraid to make little tweaks to pricing here and there, or offer occasional steep discounts to move inventory or bring dormant customers in.
But don’t go making major, business-altering decisions about pricing unless you have some pretty clear data to support it.
Don’t disregard this point, but your efforts are better spent elsewhere.
“I had a negative experience.”
OK, definitely pay attention to this. In today’s age, you have less wiggle room for error than ever.
Bad experiences will be talked about, blogged about, left in reviews and shared with ten friends.
But you already know that, right?
I mean, if you’re not already trying to minimize or eliminate poor experiences, what are you doing here?
No, you’re working hard every day to ensure that poor experiences happen less and less, and that when they do, they’re addressed quickly and deliberately.
Make positive experiences a priority and you’ll never go wrong.
But in terms of changes that will make the biggest difference, fastest, there’s no mistake — the final obstacle keeping your customers from coming back is doing more harm to your business than anything else.
“I didn’t think about it.”
32 percent of our study cited this as the number one reason they haven’t returned to a business.
The biggest oversight a business owner can make is to assume that they’re only competing with other businesses just like their own.
Other taco trucks. Other children’s clothing shops. Other car washes. Other karate dojos.
The reality? You’re competing with all of those places, and a thousand other activities, preoccupations and distractions.
Chances are, a large portion of the customers you’ve had over the past year have not thought about you once since they left.
Don’t take it personally. If they didn’t think of you, they probably didn’t think of your competitor either.
But that presents you with an amazing opportunity.
Making a difference here is very simple. It boils down to two simple points:
Focus on Loyalty and Regular communication.
Don’t believe us? Here are two stats that will bring things home for you:
80 percent of your future revenue will come from 20 percent of your current customers.
Customers who receive regular communication from a business come in two to three times more often than those who don’t.
Find your most loyal customers, and then talk to them more often.
The payoff? According to Bain Capital, it could be astronomical.
Increasing your customer retention rate even 5 percent will increase profits by 25-95 percent, depending on your industry.
The data shows that regular communication with these customers can make a big difference — indeed, all the difference.
So, if you want to keep hustling nonstop for new customers, go for it. Just know — the numbers are not on your side.
Unless you’re actively trying to develop a long-term, communication-centered relationship with every customer that walks in, you’re likely setting yourself up for a lot of one-night stands.
And how many of those can your business survive on?
Bring Your Customers Back
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Start rewarding your most loyal customers by implementing a CityGro Loyalty system.
Whether you’re using a kiosk, digital punch card or SmartOffers, CityGro will help you increase customer retention by improving communication, driving engagement and making your customers happy.