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Are You About to Lose a Customer? Watch for These Five Warning Signs


No small business wants to lose a customer. But for a variety of reasons, customers will forsake a business they've bought products or services from in the past. It may be they no longer need what a business has to offer or they've had an unfortunate customer service experience. Whatever the reason, there are often "red flags" that can alert small business owners that trouble is brewing.

For small businesses, the key is being alert to these warning signs and acting on them before it’s too late. Here are five indicators you may be in the process of losing a customer:

1. Your communications efforts are met by a dwindling response. 

Many businesses distribute newsletters and marketing emails to both prospects and loyal customers. Ideally, this prompts a spike in interest in a product or service, as well as increased numbers of followers on social media.

If, however, you or your social media manager detects a lessening of followers or a dip in response to your digital advertising efforts, it’s time to get analytical. Many social media and scheduling sites offer valuable measuring resources for small businesses. With Google Analytics, you can gauge the amount of social traffic your posts and articles generate. Sites like Hootsuite and Sprout Social measure likes and followers, number of impressions, and so on.

Using these tools, you can refine your messaging or try something altogether different.

2. There’s an upswing in customer complaints and defections.

Sometimes, rapid business growth comes with unwelcome consequences. Customer demand may outstrip a company’s ability to fulfill orders or maintain the quality of its products or services. An upswing in customer complaints is a clear sign your target audience is becoming increasingly unhappy.

3. Customers start comparing you to the competition.

Never forget that consumers these days have access to unprecedented levels of information. With just a bit of research, they can easily determine how the costs and rewards of doing business with your company match up to what your competitors offer. If customers are “name-dropping” the competition more frequently, you should take notice.

The best defense here involves understanding your competitors’ performance in the marketplace. Be sure you know who your top competitors are, what’s happening with their brands and marketing efforts and how well they’re doing in customer outreach. Competitive research can help you better differentiate your business in the eyes of customers. 

4. A company is going through large-scale changes. 

If your clientele includes small-, medium-, or larger businesses, chances are they're either in an industry that's going through big changes or their own leadership is experiencing some turmoil. Either way, if you're aware of these developments, use the opportunity to reach out and see how you can help that business through the tough times, or make the effort to familiarize a new CEO or VP of Marketing with what you've done for their company in the past.

5. Customers aren't getting what they want from your business. 

You may think lowering prices offers you a competitive edge, but if your customers value quality service more, then you're missing the mark. According to Questback, an online survey and feedback software company, "What worked yesterday might not work today because customers' lives, and therefore needs, change over time." The solution? Conduct in-depth market research to make sure "your offerings and your marketing align with what your customers are actually looking for."

Maintaining the allegiance of satisfied customers should be high on every small business owner's list of priorities. Costs of new customer acquisition generally exceed those involved in keeping existing customers happy. The best strategy is staying on top of changes in the marketplace and in your customer base, and responding in a way that demonstrates how much you value the people who do business with you.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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