Series 2, Part 14: Why You Need to Focus on Customer Dissatisfaction

My previous post provided an alarming statistic. On average, 43 percent of consumers who buy from the dealers participating in our study will not purchase from them in the following year. They will have defected. The result is that pool companies in our database collectively lose 16,000 customers every year with average annual purchases of $253 each. And more importantly, the vast majority of retailers do not know why these customers left. 

Whoa! How can they take effective action if they don’t know why these consumers defected?

A customer retention secret

In my initial post in this series, I debunked the myth of customer satisfaction. Even extremely satisfied customers may not be loyal, while many loyal customers are not sufficiently satisfied. Now I will let you in on a little secret. When it comes to retaining customers, understanding customer dissatisfaction may be more important than customer satisfaction. As Bill Gates said, “Your most unhappy customers are your greatest source of learning.”

Most consumers don’t express their complaints

The problem is that most retail owners and managers either assume they know why customers leave or else they just ignore defection altogether. Although our study participants all said they responded to complaints, none had an organized complaint tracking system. But even if they did, it would not be sufficient. What companies fail to appreciate is that very few unhappy consumers actually complain — as few as 5 percent. Here's just some of the reasons consumers don’t express their complaints:

  • Time
  • Fear of confrontation
  • Don’t know how
  • See no benefit
  • Simpler to go to a competitor
  • Indifference

Develop a retention approach to customer dissatisfaction

Because of all of the above reasons, pool retailers must routinely seek out information. They need to understand how customers are dissatisfied in order to improve retention and prevent defection. Often unexpressed complaints are the more serious issues that can create greater customer defection. Proactive efforts to uncover customer dissatisfaction can provide an inventory that can be examined for retention impact and action. Here are a few tips:

Make it easy for customers to register their dissatisfaction.

  • Telephone, email, letters, blogs, and spaces on payment vouchers all provide feedback options.
  • Train staff to ask and record, “What is one thing we could have done better to improve your experience with us?”
  • Reach out to customers by telephone, email or when on service calls.

Positively acknowledge every problem by mail, telephone or email.

  • Let the customer know the feedback was appreciated.

Get resolution quickly.

Track dissatisfaction and analyze for patterns and insights routinely.

The more your customers voice complaints, get them resolved, and feel positive about the resolution experience, the stronger their likelihood to repurchase and recommend. We have been working with several clients in this area and look forward to sharing the results in future posts.

Your turn

How do you track customer complaints? Do you proactively seek customer feedback? How do you gain an understanding of the reasons customers defect? How are you using the results to improve your business? Where could you use some help?

Read the previous post in this series: How Many of Your Customers are Casual? 

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