How To Lose A Customer: A Customer Retention Cautionary Tale

“Hey Ali, it’s John from the dairy farm. We notice you haven’t been actively using your account with us and just wanted to check in with you.”

When’s the last time you got a personal call like that from a business? It’s awesome, right? This kind of outreach is exactly what I encourage for my clients so their customers feel seen, heard and valued.

In today’s Internet self-serve world, it’s easy to get almost anything from the Internet. From products (even milk!) to high-end services that used to be tailor-made for personal relationships – think accounting, financial advice, and even tailor-made suits.

Business leaders need to be thoughtful and deliberate to keep customers loyal.

So under normal circumstances, this phone call would have warmed the cockles of my customer heart. Especially since I LOVE this business of home-delivered, local dairy and meats. I’ve referred a bunch of folks to them in the past and it’s the only place we buy our holiday turkeys. We may not be frequent buyers, but when we do purchase, we spend a bundle.

With this phone call, however, all I felt was a slow burn of annoyance.

Why?

At some point a few months earlier, I had received a similar call from the dairy. The rep told me they like to keep the account roster lean and mean because they have to pay for each person on their customer list. It cost them money to keep lost accounts active, so when a customer’s activity dwindled, they called. And called. About once a month, I got a friendly phone call from the dairy asking about my account status.

I felt seen, alright, but I didn’t feel heard or valued. Actually, I felt pestered.

Big mistake.

Here’s how they turned a customer experience victory into defeat.

The moment their rep told me these outreach calls were to purge their customer list, it changed how I felt when the phone rang. It wasn’t caring outreach because it wasn’t about me, it was about them. There’s a difference between transparency and giving customers too much insight into the guts of your business.

As soon as the calls were reframed from “we care about you” to “we don’t want to pay to keep you on our customer list” they were on the losing side of the conversation.

What were they thinking?!?

Whatever they were paying on a per-customer basis to keep someone on their list, I can guarantee my annual order more than made up for it. They should have been focused on the big picture and ways to entice me into growing my orders instead of focusing on lack of frequency.

Side note: They also need to take another look at their technology choices – if they’re paying so much to keep customers on their list that they need to commit time resources to emails and phone calls, there’s likely a problem with their back-end systems.

Technology wasn’t the only flaw in their systems. When they called, I explained that I was a big fan of their company and a regular referrer. In fact, I made the same speech every time they called. Too many times – and it was getting tiring. They were asking, but they weren’t listening. Getting their calls on the monthly was about to cost them a customer.

So what are the takeaways here?

First, sometimes less is more. You need to find the right amount of follow up to keep your customers engaged without making them feel harassed. How much follow up is that? It depends on your business, your customers and the quality of what you have to say.

Second, if you collect information from your customers, use it appropriately. If you ask a question, be prepared to do something with the answer. Otherwise, don’t bother asking.

Third, don’t be penny-wise and pound-foolish. Or dollar-foolish. Or Euro-foolish. Whatever your currency, focus on the opportunity for the larger customer relationship. When I learned that my expensive annual holiday orders might not be enough to merit my inclusion on their customer list, it absolutely impacted how I felt about being a customer.

Finally, it’s all in the details. One comment from a single customer service rep shifted my thinking about my once-favorite dairy farm. I’m still a customer, but I’m much more open to alternatives. Once you’ve broken a trust bond with customers, it’s much, much harder to win them back. Period.