Loss of Trust Main Reason for Customer Defection

“The job isn’t to just fix the problem. It is also to restore the customer’s confidence. Do Both!” – Shep Hyken

Let us just begin by saying that the main reason for customer defection from any company is the loss of trust. We have mentioned repeatedly that for customers to stay with a company it is imperative that they like the people in the company and can largely, trust them. Trust is the differentiator, and is what helps create, build, and maintain durable company-customer relationships. While different customers may have a variety of reasons to stay with a company, the top reason for leaving would be the dissolution of trust. It becomes the onus therefore, of companies to behave and conduct themselves in a manner that would create and increase customer trust before, during, and even post the association.

Winning customer trust is not easy. It requires consistency of word, actions, and behaviour – all of which must reflect trustworthiness, reliability, and compliance with promises made to them. Each person in the company must have rapport building skills and empathy, such that not only can each one understand what customers need, but also be able to convince customers with their words and actions of the company’s reliability. The fact is that customers have choices – of companies and products, and will not take anything less from any company, and would leave if they detect even the slightest hint of dishonesty and distrust. As mentioned the top reason for customer defection is the loss of trust. A company must be able to display consistently traits, competence, and behaviour that would convince customers of the integrity and high trustworthiness of the company. Customers no longer believe in mere lip service – words must be backed by solid action and the proficiency of the company. The overall service and products of the company must reflect the values and culture the company may claim to have.

In several expositions, we have mentioned that while customers may be satisfied with a company’s products, only about 21% actually intend to continue their association. This is because over time, their faith in the company may have been eroded steadily. While customer feedback surveys may help to gain customer perspective on the quality, benefits, pricing, and other aspects of a company and its offerings, they are usually not sufficient to assess the level of trust that customers may have in the company. It has become imperative for companies to not only stay true to their promises to customers, but also check back with customers on whether they have been able to gain and sustain their trust. The main reason for customer defection is loss of trust and this happens due to the lack of proper communication and the overall demeanour of the company.

We know that it is a lot easier and cheaper to retain customers, and that existing loyal customers contribute at least 80% of the company’s profits. Customer defection due to loss of trust could be very tough to manage, since such customers would possibly never return, and could adversely influence other existing and potential customers. The possibility of gaining success with new customers is very low – only between 5%-20% and they may not even reach the stage of profitability and loyalty. This effectively means that companies would lose a lot of business and money in making new customers, which they could save by preventing customer defection by keeping their trust.

We are not saying that all companies lose trust intentionally, or purposefully cheat their customers. However, given that customers have now changed – their expectations, demands, preferences, attitudes, and the way they interact with companies. They refuse to accept ‘second best’, and if companies do not comply or behave in ways that would undermine their competence and credibility, customer defection would be a given. Employees that deal directly with customers must be most aware of how their words and actions would affect the trust of customers, and what kinds of experiences would result in customer defection. Irrespective of size, resources at disposal, and stature, no company is immune and can afford losing customers. One shabby incident can stick in the mind of customers for a very long time, and if the incident led to a loss of trust, the customer could possibly never come back. It is also possible that several, seemingly small and harmless incidents, also take the form of loss of trust, leading to customer defection.

Does your company know the mistakes and things it should avoid in order to keep their trust and save itself from customer defection? Everyone is busy, but in the rush of work, the crucial mistake that companies make is leaving customers feeling unappreciated. Of all the incidents of customer defection, at least 70% customers stated that they were not given enough importance, and they felt that the company was indifferent towards them. If customers feel that a company and its people do not care about them, they would defect to a company that made them feel valued. Customers spend their valuable resources on a company, and the unsaid expectation is that the company would appreciate and pay consistent attention to the relationship. For a company, a relationship with a customer could be one of many, but for the customer the relationship is unique, and they expect that the company would make them feel special and important at all times.

Customer defection happens when customers do not see their value, which in turn results in them losing faith and trust in the company. It is imperative for a company to do things regularly that would show its appreciation and thanks for the business the customer affords it. Small things make a big difference – saying thank you at the end of each interaction, remembering their special occasions, appreciating or acknowledging the customers achievements on a public forum, organizing special events just for them, and other such public displays of appreciation and thankfulness for the customers and their business.

We all know as customers, how much attention is showered on us when we are either, in the process of becoming customers, or have just become customers at a company. However, post those first few interactions, the company seems to forget about new customers, and it would seem expect them to understand the processes, and guidelines for doing business with the company. This confuses and irritates customers, since they expect to be treated with respect and care throughout the association, and this sudden ‘snubbing’ leads to an erosion of trust. A short period of attention and care, leads to one thing – customer defection, with a very slim chance of them ever returning.

One of the top reasons for loss of trust and customer defection is the breaking of promises by a company. Many companies, in the rush to gain more customers, make several promises that they either, do not intend to keep or forget about when they get the customers. However, customers do not forget, and when they perceive the broken promises and disregard from companies, they leave and do not return. The fact is that companies create tall expectations in the mind of the customers through the promises they make, and when those expectations are shattered, it not only angers customers, it makes them spiteful and ready to vent on the most visible and public forums, which in turn could severely damage the reputation and profits of a company.

Companies lose the trust of customers in several ways that– not apologizing for their mistakes, trying to cover up by offering excuses for lapses, rudeness, shoddy customer service, and many others. Research has proved that a company’s profits and sustainability depends on customer trust. Having it can save a company from customer defection, and disrepute. In addition, trusting customers add hugely to the company’s bottom line, and contributes to its sustainable success.

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