Keeping customers happy once you have them board is vital for small businesses. This maintains your income, your position as expert or 'go to' with customers and provides opportunities for referrals and extra services.
So what about attracting new customers?
Failing to attract enough customers is concerning - but if you know why it’s happening, you might be able to turn things around. Here are six reasons why customers could be going elsewhere and what to do about it.
1. Your prices are too high - or too low
If your prices are perceived to be too high, they could drive some or all of your potential customers away. It's important to understand where customers are prepared to spend money on your product/service and where they would rather go without. Be clear on your USP (Unique Selling Point) You need to create value before you can claim it.
Another point some business owners don’t realise is that setting your pricing too low can create the impression that your products or services are low quality - which can be equally off-putting.Customers are not always looking for the cheapest option - indeed those that are will likely always look for the cheapest price. The key to price setting is knowing your market, your ideal customer and your competitors.
The aim, is to set optimum prices, which allows you to maximise your profits while still remaining attractive to customers.Focus on service and the end-to-end customer experience that's as 'friction free' as possible - that is being easy to do business with.
2. Your products/services are outdated
Perhaps your products or services just aren’t as attractive as they once were or customers have forgotten about you. Possibly you competitors are superior to yours, or they make it easier to do business. Maybe yours look a little old hat and don't serve the needs of your ideal customer anymore.
Evolution is the key to longevity, which means you might only have to enhance or update your products and then shout about it to existing and new customers. Alternatively, you might need to introduce new ones and phase out outdated products or services. Before spending significant sums on developing a new product or service, carry out full market research to maximise your chances of success.
3. Your 'premises' need rethinking
This can apply to bricks and mortar and online business shop fronts. Outdated, poorly decorated/presented, cramped/cluttered or otherwise can deter footfall.
Be easy to deal with, approachable, available and able to help. Make checkout click and simple. If you're bricks and mortar be inviting and friendly without being overbearing - this is equally off-putting.
Operating from a hard-to-reach location can be another reason why businesses fail to attract punters. Despite your best marketing efforts, you might not be able to attract sufficient footfall in your present location, which means you’ll have to rethink your business model or move - this could mean moving to an online operation.
4. Your customer service is lacking
You might believe you look after your customers’ every need whenever you interact with them - but would they agree? Do you really know and understand your customers needs? Do your employees provide the levels of service required to attract and retain customers? How do you handle complaints? You should aim to exceed expectations and over deliver. Customer service excellence can help you sell more to existing customers. Do you and your team need to brush up your customer service skills? Map out your customer journey and how this can be made better.
When you are being squeezed on margins, it's natural to look at ways of keeping costs down while keeping customers coming through the door. Sadly, what often happens is that costs are cut in the customer-facing areas, such as training budgets which directly impacts customer service. It's crucial that customers' needs are met and that you continue to find new ways to engage with them and create stronger relationships.
5. Your marketing reach is poor
Lack of promotion, or promoting your business in the wrong way, could explain why you’re not attracting enough customers. If people don’t know you exist, they won’t buy from you. If your promotional activity fails to reach potential customers and convince them to find out more about you, you’ll simply be wasting time and money.
From social media, online marketing and PR to advertising, email marketing and direct marketing, there are many ways to engage potential and existing customers. The key, of course, is to find out which methods work best for you. Another way to stay on the right track is to create a marketing plan. Work out where you want to be and how you are going to get there. Then measure your results against this plan so you can tweak it.
6. Your market has disappeared
The unfortunate fact is that many products, services and indeed businesses simply come to the end of the road and there is no longer a market for them. This happens because customer tastes, wants and needs change and the firm's business model isn't agile enough to adapt. It pays to make sure your market knowledge remains current. Keep up to date with trends and developments in your sector - such as new processes, tech or innovation by competitors - to stay ahead of the curve. Then you'll always be in a position to adapt to new developments, conditions and customer demands.