The Top 5 Reasons Customers Don’t Return to Your BrandFeb 9, 2017 - by Jason Grunberg
Loyal customers are the most valuable customers. Our most iconic brands are known for cultivating long-standing relationships and creating the ever-valued “tribe” of enthusiasts and advocates. Its why we still line up at the Apple store for a launch, why there’s 2-3 brand names that appear on the majority of tags in our closet, why our coffee comes from Starbucks, Dunkin’ or McDonalds (never and, always or).
What then, prevents shoppers from becoming loyal customers? Why are only 20% of customers – and often, far fewer – the ones who generate the revenue? We asked marketers a variation on this question in a study conducted with Forbes Insights. The study queried 300 retail and media executives to discover how they approach customer retention and how they leverage it throughout their enterprises.
We asked them: What are the top 2 internal barriers that prevent people from becoming repeat customers of your business?
The answers were sobering. 3 out of the 5 the most-commonly cited answers (first 3 outlined below) can fairly be lumped together as “internal disarray.” Although they touch on technology, technology isn’t the point.
Instead, three of the most-common reasons that customers don’t come back have everything to do with a company’s organization, leadership and management.
- The most frequently-cited internal barrier to customer loyalty was “lack of consistent marketing efforts and communication,” chosen by more than half (51%). Yes, that can be a technology problem, if marketers don’t have the ability to easily see which customers have been contacted through which channels or the ability to coordinate campaigns (with or without any level of personalization). But often it’s a leadership, organizational design and data strategy challenge, where the one hand — traditional marketing — doesn’t know what the other – digital marketing — is doing.
- 40% of the marketing executives surveyed cited lack of modern, enabling technologies as a reason customers don’t come back. That’s likely another sign of internal confusion. There are plenty of modern, enabling technologies available to all kinds of digital marketers, and obviously, at Sailthru, we provide solutions that are specifically designed to help marketers acquire, grow and retain customers so that they become repeat purchasers.
- The third, equally dismaying reason that marketers believe customers don’t return to shop with them repeatedly is “poor/inconsistent customer service.” Again, that’s all about internal management, or the lack of it.
The other top 2 barriers are directly related to technology…
They seem to indicate that front-line marketers absolutely understand the value of modern technology, but that they may have difficulty translating that conviction to those higher up in management.
- 40% percent of retailers said one of the reasons customers didn’t return to them was that they didn’t offer a seamless, omnichannel shopping experience. And, of course, that’s something that an investment in the appropriate technologies alongside changes in operations can provide. The tough part is that at least 40% of marketers know they need a seamless, omnichannel shopping experience, but they still can’t persuade their organizations to adopt this pillar of modern digital marketing. Given the size of the initiative many most likely don’t know where to start or who is on first.
- Lack of personalization, chosen by 27% as a reason customers don’t become more loyal, presents similar issues. Investment in technology can allow personalization, and even small steps along the road to personalization can make a big difference. But here we see that at least 27% of marketers know they need to start personalizing, and still can’t make it happen. Given the importance of data in delivering and constantly improving personalization, this barrier might speak as much to technology challenges as it does to data governance. If marketing doesn’t have a stake in customer data ownership that data goes unused as a resource.
Conundrums like these are why we always advise clients to start by identifying their goals and then work backwards from there. When everything is a priority, nothing gets accomplished and as budgets continue to shift to marketing organizations in terms of technology buying power, marketing must have a seat at the table when it comes to operations designed to fulfill the customer experience, manage customer data and develop the insights necessary to reset goals over time.
Until shifts are made to favor long-term profitability over short-term conversion, the conversations necessary to overcome these barriers will stay in the minds, rather than become matter.