While this metric highlights the importance of growing your existing customer base, it is also revealing to discover why customers stop coming back. According to a recent study from the U.S. Small Business Administration and the U.S. Chamber of Commerce, the attrition rate of a businessâ€™s customer base is caused by:
* A poor customer experience â€“ Almost 7 out of 10 people who stop buying from a business do so because they were disappointed by the service they received either during the purchasing process or after buying a product.
* Product related issues â€“ 14% of customer attrition is the result of dissatisfaction with the product that was purchased.
* Going to the competition â€“ 9% of customers end up buying from a competitor due to lower prices, better terms, promotions, etc.
By pointing out that the vast majority of a companyâ€™s attrition rate is due to the customer experience, these statistics also reveal the areas where businesses should focus to keep their customers coming back for more. These areas include:
* Being positioned as a resource â€“ Because competing electronics dealers can carry many of the same products, one way to separate your business from the competition is by sharing your product knowledge through blogs, articles, and social media platforms.
* Knowing what your customers buy â€“ Tracking your customersâ€™ buying tendencies can provide opportunities that enable you to speak directly to them about brands that they have already purchased.
* Showing the human side of your business via social media â€“ Two-way conversations that take place on social media platforms have revolutionized the messaging paradigm between businesses and their customers. By participating in conversational threads, your customers will see that your business is engaged and that you are listening to them.
Success in growing revenues will be directly related to the quality of your existing customersâ€™ experience when they interact with your business. Electronics dealers, who share their knowledge, track their customersâ€™ buying preferences, and foster relationships will retain their existing customers, grow their base, and increase their revenues.