The Customer Vanishing Act: Where’d Your Customers Go, and Why?

Everyone loses customers now and then. How many customers have you lost in the last 6 months?

More importantly…why did you lose them? Price? Service? Capability? Suitability for the situation (aka “merchantibility”).

If you’re in the software business (including web-based applications), how many prospects tried your service in the last 6 months and didn’t continue after the trial?

Most any software company would have that information, but how many will know exactly why each one decided not to purchase?

And how many of those will actually use that information to improve their products – and thus, their sales?

Not too long ago, I was talking to a software company owner who was troubled by large volumes of downloads from specific countries outside of the U.S. The concern originally focused on the fact that these excessive downloads would skew their download-to-purchase statistics – which were a number based on global sales and global downloads.

In my mind, the concern was focused on the wrong thing: The number, rather than the reason for the number.

Download-to-purchase statistics tell you valuable info, but they don’t tell you how to improve things.

I suggested that they split the downloads out by country and measure that way. This solves a several problems.

First, it tells their development team how much to worry about international currency, language translation and similar issues. Why? If the overwhelming bulk of their trial downloads are from the U.S., Canada, England, New Zealand and Australia, investing in a complex language and currency enhancement to their products might not produce much of a return on investment ( ROI ).

Second, it lets them focus on that pesky downloads-to-purchase number on a country-by-country basis, which immediately removes the large numbers of downloads from certain countries that skew their numbers. It also lets them examine their statistics based on each country’s purchase tendencies. Each one has its own issues – not the least of which is how their currency fares against the U.S. dollar, and how their U.S. pricing fits that country’s cost of living and general economy.

For example, a USD99 package of software seems cheap here, but in some countries, USD99 translates into a month’s wages. Not exactly smart pricing, at least in that country.

After sharing all of that, I suggested that the downloads-to-purchase number (which was about 2%) really isn’t the thing to focus on. The real goal is to raise the number of purchases and the way to impact that is to find out WHY 98% aren’t buying.

The 98% number jumps out at you, but the real story comes from those inside that group.

For example, if 63.6% of them are not buying because the program is too hard to get started on, or the help is terrible, or the terminology used on the screens is not their industry lingo, or whatever – THAT’S the number to fix that will have the greatest impact on the bottom line.

A 2% increase – changing the 98% to 2% ratio to 96% to 4% could DOUBLE your revenue. It might be one simple thing causing a big percentage of those 98% who decided not to buy.

Sure, it might be 5 things, but I’ll bet it isn’t. I’ll bet it’s one thing. You might end up with a list of 5 things across everyone you ask, but most of them will probably just name one thing.

One of those five things might really stink to fix, but if it caused 24% of your trials to quit, gee it just might be the thing to look into:)

So where’d your customers go? They went into that 98% rabbit hole.

Now it’s time to ask every single one of them why they didn’t buy.

Give them a good reason to tell you. Explain that you really do care what their reason was and that you will use the info to improve the program, not only in the hopes that they’ll change their mind, but so someone just like them won’t have the same reaction when they try it.

Start small by doing this:

  • Ask the last 10 customers who quit using your product or service WHY they stopped using you.
  • Ask those same 10 former customers what would get them to change to another vendor who ISN’T you.
  • Ask the 10 newest customers the big reason that made them decide to buy your product/service.
  • Ask them what would make them change to another vendor.

Now, act on what you learn. You’ll find out where your customers went, and why.

You can do that TODAY, so don’t decide to invest $10,000 in survey outsourcing, measurement software etc. Get your yellow pad out, get a pen, and get your customer list on the screen. Make 20 phone calls.