What Happened to Customer Loyalty?

Marketing Viewpoint by Ruth Winett

Why Customers Leave, and What To Do About It

Cash has been part of human daily life since before there was written history. Yet, if something as fundamental as cash has nearly disappeared from use in Scandinavia, no product or service offered by businesses is guaranteed a market in perpetuity. Here are some of the reasons that customers leave, plus some suggestions on how to discourage them from leaving.

Why Customers Leave

The media is full of stories of major companies that are losing customers. These are some of the reasons for their departure.

Changing needs--Customer/patient/donor loyalty may shift as needs shift. Younger online searchers are switching from Google to AI-generated content or going directly to Amazon when searching for goods to purchase.
Price increases and competition—Target customers have migrated to discounters Walmart and Amazon. However, offering one-time discounts does not guarantee loyalty over time.
Product changes-- New is not necessarily better as Coca-Cola found when it tinkered with its classic formula. Assess whether your customers value planned product changes.
Poor service—Replacing live customer support with online chat and irrelevant FAQs (Frequently Answered Questions) or eliminating printed directions and manuals for electronic devices and other equipment frustrates customers, and many leave.
Decrease in quality--Products are no longer useful, up-to-date, or appealing. Cable customers are cutting the cord and streaming instead. Prices are also an issue.
Boredom or desire for change—Customers that had already watched every show or movie of interest on Netflix were ready to try Starz or Hulu.= Operational failures—Stop and Shop’s bare shelves, caused by IT problems at headquarters, drove shoppers to competitors. Will the shoppers return?

Changing company values, orientation, focus, or decreased commitment to customers. Google originally promised to protect users’ privacy. This lofty value disappeared long ago. Some avoid using Gmail to protect their personal information.

How To Cultivate Customer Loyalty

First, offer the best products and services possible to satisfy customers and cultivate loyalty. Second, if customers leave, find out why. Third, take corrective action. A company interviewed a lost customer to find out why they left and found that the company’s lawyer was rude. This was a correctable problem.

Finally, and most important, stay in touch with your customers. They will give you suggestions for new offerings and advice on improving existing products and services.

Sources:

“Video Streamers Hit Pause,” Wall Street Journal, 11/21/24.

“Restaurant Deals, Draw Diners But Don’t Secure Their Loyalty", Wall Street Journal, 11/26/24.

“Target Misfires With Shoppers,” Wall Street Journal, 11/27/24.

“Googling Is for Old People. That’s a Problem for Google,” Wall Street Journal, 11/30-12/1/24.

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