Understanding Customer Disloyalty

“And remember that people want to be loyal to brands. When a brand delivers a fantastic experience, it makes their next purchase decision easier.” – Matthew Fenton

A business may try hard and even relentlessly to encourage and build customer loyalty, but it is not possible to succeed with every customer and at all times. A company may feel elated by a great positive comment from a customer, but the test of customer loyalty comes only by identifying and monitoring trends and patterns. Doing so additionally allows businesses to understand customer disloyalty – the reasons, patterns before defection, and what can be done to prevent it. Customer disloyalty is not as often connected with a price hike (as businesses believe), but has more to do with poor service, cumbersome business processes, too much effort required, and distrust. We have mentioned earlier that customers prefer to do business with a company that offers frictionless and easy service and business processes. They prefer companies that keep customer effort to a negligible amount, deliver on promises, and provide seamless and speedy resolutions. All these factors lead to long-term customers, while the converse leads to high defection rates.

It may seem unfair and highly problematic for companies to know that the amount of customer effort links directly to customer loyalty / disloyalty. However, research and studies have proved conclusively that a company that makes it easier for its customers to do business, solves their issues quicker, and provides lightning speed responses are more likely to have loyal customers. Rather than looking outward, it would behove a company to look inward in order to discover the root causes that lead to customer disloyalty and use the findings to make the requisite changes and improvements. Companies that have attained success and world class status have become so by learning and understanding from customer disloyalty and failure. They have truly focused their efforts on removing barriers for their customers and making the association smooth, free of roadblocks, and effortless. This is what makes customer service excellence and would be the top reason for customers staying profitable and loyal to a company.

The simplest yet one of the top ways to predict customer disloyalty is tracking the number of poor experiences a customer may have had with the company. Poor experiences come about when customers have to expend too much energy and effort in connecting with and getting service from a company. This effectively means that even if a company may exceed expectations some times, this will not translate to customer loyalty. Another of the findings in the surveys revealed that of the top five reasons that customers would defect, four of the reasons had something to do with the amount of trouble and effort they had to put in to do business and to have their problems resolved. All these facts conclusively prove that in order to bring down customer disloyalty, a business must make customer effort nil or at least negligible. The higher the amount of customer effort, the more would be the disloyalty. Customers want to know and consistently see that the company makes it easy for them and ensures the least amount of interruptions in the association.

What do your customers believe to be the things that increase their effort? Some of the top reasons for customer disloyalty are when a company over promises and under delivers. Rude, slovenly, slow, and shoddy customer experiences is another top reason, while long wait times over the phone and their call being transferred to a number of people making them having to repeat their problem, follow close behind. Another highly frustrating factor is when customers need to follow up for the resolution of their problems and despite requests, do not receive reverts or call back from the company. Who would want to stay with a company that makes it customers go from ‘pillar to post’ for a simple query or a problem resolution? A sure shot way to gain customer disloyalty is when companies do not share information – that is do not let the customer know whether someone is dealing with their problem and by when they would receive a response. Customers hate to deal with annoying companies – the ones that use every opportunity to sell and worse still make it so uncomfortable that customers are forced to buy. Poorly done websites and stale content are other major ‘turn offs’ for a company and reasons for customer disloyalty.

We know that customers now have many choices and access to a lot of information. However, when they need pertinent information with regard to their association with the company, they would expect that either, the company is accessible to them at all times or at least have self-service options that work. A company that fails to deliver on either would actually be making their customers work harder to carry on the association and as such would fail in their understanding of what makes customers leave. The above point directly connects to the next – of well-trained and knowledgeable customer service staff. Just being able to get in touch with the service teams does not suffice. The service teams must be empowered and well equipped to deliver top class service and provide intelligent responses and solutions to their problems. No customer has the time or inclination to deal with robotic, ill-informed, and seemingly mindless agents – they would much rather do business with a company that has sharp, intelligent, and well-informed representatives.

When a company fails to make customer service a company culture, the result is disjointed teams, lack of cooperation, and failure to use systems and information to serve customers at every level and through any department. This disintegrated approach would most definitely result in inconsistent service and information across various touch points and channels, leading customers to become disgruntled and lose trust in the company. The messages such a company sends out would be disjointed and different across every channel, which would serve to confuse and irritate customers, leading to customer disloyalty and defection.

The blunder some companies make is in believing that simply by putting together a customer loyalty program, they would gain long-term customers. Customers, as mentioned, are now a lot smarter and tech-savvy. They understand that most of these programs are primarily a way to collect data about customers, which in turn would help the company to prepare customized marketing pitches and strategies. Customers are unaware of how these programs would benefit them and hence would either not join, or unsubscribe completely from a company. Without providing customers a clear answer and path for their benefit, a company cannot hope to inspire loyalty – in fact, these seemingly meaningless programs would instead move them to a company’s competitors, with better incentives.

Companies must understand customer disloyalty and take long-term relationships with customers a lot more seriously. The market is abuzz with similar offerings and an ever-increasing number of ‘players’ using every opportunity to take away customers from another company. Shrinking growth avenues, reducing profit margins, and increasing pressure on the already limited resources are posing bigger challenges for companies and unless they make every effort to retain their customers, they would be staring down the dark abyss of losses caused by customer defection. Customers now can switch to a competitor with just one click and do not hesitate to defect if the company they do business with fails to meet their expectations. It has become more imperative and a business need for any company, to not only focus on retaining customers but also thoroughly understand the reasons for customer disloyalty in order to remain successful.

Learn about a new approach to better customer service!

Interactive Guides for Superior Customer Service

Develop interactive decision trees for troubleshooting, cold calling scripts, medical appointments, or process automation. Enhance sales performance and customer retention across your call centers. Lower costs with customer self-service.

Interactive Decision Tree