Sales & Marketing -- Customer Turnoffs

Customer loyalty is not dead, but some companies are doing their best to kill it -- driving away buyers by offering low perceived value, failing to back up products, providing limited selection or availability, or offering poor or inconsistent product service and support.

U.S. companies on average lose half their customers every five years, says Paul R. Timm, professor and former chair of the Dept. of Organizational Leadership at Brigham Young University's Marriott School of Management, Provo, Utah.

Despite "continuous improvements in the quality of manufactured goods, negligible price increases, and unending rhetoric about treating customers right, customer satisfaction is actually declining in the United States," says Timm, author of Seven Power Strategies for Building Customer Loyalty (2001, AMACOM). The corollary, of course, is that many companies are constantly scrambling to attract replacement customer sets, an expensive process.

"It costs five times as much to generate a new customer as it does to keep an existing one," notes Timm. Truth is, few companies even track customer-retention rates, much less inquire about what might be driving those customers away.

Timm, however, has been posing the question for 12 years through an ongoing survey of business customers and consumers that asks, "What turns you off as a customer?" The answers boil down to this: Somewhere there's a disconnect between service intentions and reality, and as a result companies don't live up to customer expectations. Incredibly, these often are expectations that the company has set up for itself.

"Customers are routinely surprised because most businesses fail to meet their own deadlines," says Timm. "When a computer-company technician tells a customer that its mainframe will be restored to service 'soon,' for instance, the customer might think 20 minutes, while the technician means eight hours. That's an expectation that's doomed from the start."

Timm's research found three categories of customer turnoffs that account for 97% of all responses to his survey:

Value turnoffs. In effect, this means not getting what you pay for. These include inadequate guarantees, a failure to meet quality expectations, and high prices relative to the value perceived. "Customers don't expect the same thing from low-cost items as they do from more costly ones," says Timm, "but when characteristics of the core product fail to live up to what customers anticipate, they experience value turnoffs."

Systems turnoffs. These arise from the way a company delivers its products or services. "When transactions are unnecessarily complicated, inefficient, or troublesome, customers experience systems turn-offs," says Timm. "Employees who lack the knowledge to answer customer questions, or organizations that have just one person capable of fulfilling a key function, are symptomatic of systems failures. So are telephone menus that are unnecessarily complicated." The No. 1 complaint throughout Timm's research was slow service. But lack of delivery options, cluttered workplaces, unnecessary or repetitious paperwork requirements, poor product selection, and inadequate reordering processes also were mentioned.

People turnoffs. These are the things we most often associate with poor service and include lack of courtesy or attention, inappropriate or unprofessional behavior, or an indifferent attitude -- in short, any behavior that conveys a lack of care or consideration for the customer. Timm recalls a service strategy that was in place when he worked in sales for Xerox Corp.: "When customers called for a technician to fix their copy machine, we promised that someone would be at their office at 2 p.m. even when we knew the service rep would be there by 1:30. That way, we always came out as service winners."

William Keenan Jr. is editorial director for Alexander Communications Group, New York, editor of Sales Rep's Advisor newsletter, and the former editor of Selling magazine.