The Pros and Cons of Losing a Customer

November 15, 2019

Business owners know that nothing beats customer loyalty. Loyalty is what keeps people coming back for more and telling their friends about your business. Studies show that the average business loses 10-25% of its customers each year, and in some industries this number is even higher! At the surface, customer attrition seems to be a negative thing, but in the vein of Practicing Positive Communication, there is a silver lining to customer attrition.

 

Here are a few ways that losing a customer can be a good thing:

 

 

Opens the Door for New Customers

The beauty of the world we live in is that everyone has access to and is entitled to express their opinion on your brand. There are always customers that are going to be unhappy and difficult to please, and no staff wants to serve a room full of unhappy people. While the customer may always be right, there is such thing as being perpetually unhappy and the perpetually unhappy customers are the ones that lead to low morale and high turnover from your staff. The parting of ways with an unhappy customer leaves the door open for a new, happy customer to come along (and bring their friends!).

 

Requires Management to Evaluate Staff and Services

A good manager hears a customer complaint and simply responds to the immediate problem, a great manager takes the time to listen to the complaint and take a 360-degree approach to addressing the concern. Taking an approach that examines all angles of a problem may lead to uncovering more problems, but it also provides the opportunity to address an issue in the long term rather than the short term.

 

A complaint may be directed at a member of your staff and this is an ideal opportunity for you as a manager to take stock of your staff and their strengths and weaknesses, and work to set your staff up for success both internally and externally (for example: a staff member with a great eye for detail may not have the best people skills, so a primarily customer-facing position would not suit them as well as an analytical position).

 

Perhaps you have multiple customers who are dissatisfied and are threatening to cut ties. Focus groups are a great opportunity to survey your customer landscape and find a solution to the problems your business is faced with. Perhaps the services you offer don’t meet customer needs quite like they used to.

 

Offers an Opportunity to Train

At RCS, we see every mistake as a learning opportunity, and one that provides fodder for growing your staff’s abilities. The art of customer service is the root of hospitality and there truly is an art to making customers feel valued and appreciated. Customer service isn’t a skill that comes naturally to some and providing exceptional customer service is a skill that requires consistent attention to detail and a good bit of training.

 

Your customers have high expectations of your business, and in an industry where turnover is high and unemployment is low, ensuring that your staff is trained on the proper customer service protocol is crucial. If your staff is simply expected to know how to treat your valued customers their first day on the job, you are setting your business up to face higher than average turnover. Properly training your staff not only benefits them, but it benefits your customers who expect a certain level of care from your business.

 

As the 2019 year wraps up, we encourage you to reflect not only on what made the year successful, but also how a negative experience provided an opportunity for growth.

 

Whitney Reid Pennell, president of the RCS Hospitality Group (formerly Reid Consulting Services) is a celebrated management consultant, educator and speaker. RCS, the creators of the Food and Beverage Boot Camp™, specialize in operations consulting, strategic planning, food and beverage management, and training programs.

 

For more information, phone (623) 322-0773; or visit the RCS website at www.consultingrcs.com.

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Whitney Reid Pennell
 Founder & President

Whitney Reid Pennell is the founder and president of the award-winning RCS Hospitality Group (formerly Reid Consulting Services). She is a published author and widely praised seminar leader, with over 20 years of club operations management and consulting experience. 

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