At Radial, we like to say that “You’re not a $100 bill, so not everyone’s going to like you.” But once you’ve got your business plan, marketing plan, and sales funnel defined, why are you losing customers?
The answer may have more to do with them than with you. But that doesn’t mean you can’t do something about it.
Your business changed
Chances are pretty good that if your health, fitness or wellness business is still around and in the black, it’s not the same business it was when you started it. You’ve had to make decisions about what products, programs and services to continue or sunset, what your most attractive and profitable pricing model looks like, and “who you really are.”
Each of these in-the-moment decisions may have had a lasting effect on your existing customers, so make sure that the changes you’ve made were intentional—and not just something you drifted into doing.
1. Programs & services have changed
If you started out business as a cycling chop and you’ve moved into triathlons, chances are you did it for a reason. People spend serious money on running shoes, wetsuits, swim training aids, tri coaching, nutrition and more. There’s no reason you shouldn’t have some of that action.
However, if you’ve built up a loyal customer base of dedicated “weekend warrior” B and C group riders who regularly stop in to buy tubes, chains, aero bars, and upgrade their wheelsets and component groups, don’t be surprised when a few of them get upset that the used bike section has been shrunk to make room for an endless pool and a retail area for wetsuits. Many won’t care about that stuff and will just see it as a distraction.
You may find that you’re successful in cross-selling some of your cyclists into triathlon. Just make sure that the converted retail space was part of a carefully consider plan, you’ve worked the numbers, and that there are more potential triathletes out there than dissatisfied cyclists who feel like you’ve sold out to the allure of Ironmans and similar sports. Then do whatever you’ve decided to do on purpose.
2. The “vibe” changed
If Philthy Phil’s Basic Weights Club is known far and wide for its unapologetic embrace of the “suck it up” strongman working mentality, adding a yoga studio or a day care center may leave your existing customer base feeling like the place has gone “family friendly.” And that’s okay–if it’s intentional. You’re the business owner. You’ve worked the numbers, and if the day care center means twice as many busy parents who are still into getting ripped can stop by and get their “grunt” on, good for you. But some of your customers are going to feel like you ruined a good thing.
It’s okay. People change. Businesses change. And sometimes in order to grow, they grow apart.
You’ll have to decide whether to try to go back and recapture the old “magic” (potentially alienating your new customers), change something about your business to try to keep the old ones (for instance, communicating that going forward, Tuesdays as Strongman days and Fridays are family-friendly), or be prepared to lose a few customers.
If your marketing is on target and you’re not miss-setting expectations, you’re doing nothing wrong, so don’t change gears unless it’s a strategic move with long-term value to the business.
3. The experience has changed
Perhaps your business started out as a small-box yoga studio in the corner of a strip mall. Your first few customers weren’t a certainty, and you focused extra attention to making sure their experience of your business was ideal. You brought in homemade yoga mats imported from India, served hot chai after lessons, and gently coaxed individual students through difficult asanas.
Now you’ve expanded into the space next to your old studio and added low moveable walls for social distancing. You’ve got three new yoginis and now you teach three classes in the time you used to teach two. Sure, your instructors still check in on students’ posture, but much of the class is taken by lessons conducted against a mirrored wall so a roomful of customers can see your posture.
When the leave at the end of the day, it’s no longer “See you tomorrow, Aisha.” It’s a broad “Namaste” to the class as they file out. Something’s changed, your oldest, most loyal customers know it. And they miss it.
It’s time to decide if your business is about volume or intimacy, cranking out the lessons or reinforcing a personal bond with people who’ve come to trust you as a friend. That may mean developing a conscious plan to train your staff to deliver the same kind of heartfelt, personal service experience you used to, and accepting the reality that you are now more business owner, class designer, and hiring manager than teacher.
4. The service changed
Perhaps somewhere along the way, the country club feel actually wore off your country club. A recent spate of college hires in the pro shop has resulted in fewer actual golf pros. Cutting budget in the café has led to a more surly, cafeteria-style feel to what once was an elegant lunch after an exhausting tennis match among work buddies. Maybe nobody picks up the towels any more and it’s been a while since you’ve heard from Ed, the regular member who used to regale anyone who’d listen with his stories about deep sea fishing off Cape Cod.
If you don’t care about the customer service experience, it shows. If you hire people who don’t care, it shows. Customers have probably told you in subtle ways that the service experience isn’t what it used to be.
Take time to not just ask them what could be improved and how they might suggest improving it, but actually take action to improve problems with service delivery. Learn from customer feedback where the problems are most troublesome and take action. That might mean changing the linen service, food service provider, hiring practices, repaving the tennis courts, or something else. Hint: it’s probably something you’ve been putting of doing because it’s difficult or costly.
Do it anyway. If you can’t do it right away, tell customers you’ve heard them, you’re taking action, and ask them to be patient. Sometimes simply acknowledging their dissatisfaction is a sign of honest introspection and a will to change to keep them as customers.
That counts for something. Because after customers stop complaining, the way they tell you about service problems is by not coming back.
Your customer has changed
5. Outgrew your business or their training
In our industry, we come to expect our customers to grow and evolve throughout their fitness, wellness, and healthy living journey. While it’s sometimes unexpected, it’s not uncommon for some customers to change so much that it doesn’t make sense for them to stay customers.
Sure, a few “fall back” and have to be picked back up again, and the right approach can retain those individuals as customers. Still others remain in a steady spot in their journey for years. These are the people we become used to seeing enter our business every day like clockwork.
But the ones we should be proudest of are those who we’ve nurtured as long as we can and who leave the nest on their own. Taken from that perspective, it’s a little selfish to want to claw them back, like a concerned parent shouting “don’t go too fast!” at their child pedals off on their bike for the first time without training wheels.
Those customers can become excellent references, case studies, and posters for the success of your business, and they may even be flattered to be asked. Maintain friendships, ask for feedback and improvement suggestions, root for them, and cheer them on in their exploits.
But don’t hold them back. They’re not yours to keep.
6. They moved or the drive just got too long
If a customer has moved out of your geography, your options are limited: either look for a way to retain their business online, look for a way to extend your service area or minimize the drive time (if possible), find a reliable partner business to refer them to (both the business and the customer might appreciate that!), or let them go.
Being honest enough about your ability to continue to serve far-away customers and others who find it inconvenient to travel to where you are. Short of franchising, it’s difficult for your business to be multiple places at once, and it’s never the same. Even if the business name is the same, it’s all new people and new relationships. And that’s stressful not just for you, but your customer as well.
If it’s just that the drive time has gotten awkward, you can try to forestall the inevitable by extending your hours, providing daycare so your customer doesn’t have to go someplace else to drop off the kids while they work out, or something similar.
But if you’re not ready to plop down another location near your relocated customer, the smart move is to develop and keep a strong, reliable network of business connections so that you can refer your now out-of-zipcode customer to someone you trust, who you believe will take good care of them. That’s good business for both of you, and it may end up earning your referral a new customer, your customer a new home, and both businesses a great online review.
7. They got busy
People’s priorities change. Jobs get more involved or more stressful. Some of the things you can do are: 1) Extend your hours to include times when customers aren’t busy (this assumes that motivation is still present but opportunity and convenience are not), 2) provide a “work/workout” space that includes not only equipment and facilities for fitness or wellness but usable workspace as well for taking the office with them, or 3) Find a way to communicate the de-stressing value of keeping wellness front-and-center (assumes motivation may have changed but opportunity and convenience still are).
Some of these options may mean revisiting your advertising to determine how you can re-attract people whose time is already in short supply. Keep in mind that while it might be a good exercise, it’s also putting even more stress on the time of those customers who don’t see your business as a way to de-stress.
Either way, there’s a limit to what you can do, and if the fish aren’t biting, it doesn’t make sense to reel out any more line than that.
The business environment changed
8. Development and demographic change
Neighborhoods gentrify, age, and undergo cultural transformations. That middle-class suburb with young families may have transformed over the years to middle-aged empty nesters with more disposable income and less need for daycare. That working-class urban neighborhood may now be home to upward bound Spanish speakers. The sleep strip mall that didn’t attract many walk-bys is now neighbor to a huge Masjid (mosque) with a lot of walk-by traffic driven by holy days, hours, and the presence of a nearby halal grocery.
These things have happened in the last several neighborhoods where we’ve lived. It’s just life. And smart businesses adapt to the change around them.
If your old customers aren’t coming from that neighborhood any more, they may have moved (see #6, They Have Moved). If that’s the case and you don’t intend to relocate your business, learn to serve the new demographic better (close on Fridays, hire more Spanish or Arabic speaking staff) and you may be rewarded with more business.
The financial environment changed
9. You had to raise prices: costs have gone up or economy has taken a downturn
There are many reasons a business like yours might have to raise prices. Perhaps you’ve held them artificially low for a long time and literally can’t afford to not raise them. Perhaps the cost of goods and services has gone up. And perhaps you’ve been fortunate enough that you’ve been able to add products, programs, and services to your business that create additional value–but also additional cost.
It may be a hard pill for some of your customers to swallow–especially those who themselves have faced economic challenges.
Don’t be afraid to raise your prices. After all, if people see the price of gas, groceries, and rent going up, it’s not like it was unexpected at some point. But also be clear with your existing customers why you’re raising prices, focus on your personal commitment to preserve the value they see in your business, and give folks a reason to stick around.
It may be as simple as an honest and heartfelt email that says something like:
|“We’ve tried for years to keep our prices low, and we’ve kept them as low as we can for as long as we can. Now we are faced with the uncomfortable choice of raising prices or downsizing. We don’t want to downsize. We are a local business run by real people, not a giant corporation, and we hope we have earned your trust over the years. Our promise to you is to continue to earn that trust by continuing to provide you with personal attention you can’t get from a big box outfit. Please bear with our price change, and if you can, renew now to lock in this year’s prices.”
During the pandemic that started in 2019, one of our clients did exactly that: they bared their soul to their customers, and without begging, shot straight about their challenges. A group of their most loyal customers even got together and started a GoFundMe to keep them in business.
You matter to your customers. So treat them with honesty. Simply raising prices unannounced and without an obvious reason just looks like unexpected markup that you take to the bank.
10. A competitor has moved in nearby
The funny thing about competitors is, most often, they’re not doing what you’re doing, and nearly every move they make has a hidden vulnerability.
- They offer what we offer at lower cost. But with lower cost comes cost-cutting. What are they leaving out? And do your customers really want the cheapest personal training they can find, or the best?
- They offer longer hours or greater access to skilled resources such as coaches and trainers. That means they probably have a higher payroll and other increased costs and will eventually have to pay for them by raising prices.
- They offer a wider range of products and services than we do. Then their costs to sell, staff and carry inventory are greater than yours. You’re not really competing against their whole business, but the portion of it that’s priced comparably for similar products and services. You weren’t chasing that extra line of revenue before, so unless it’s part of your business expansion plan, why suddenly chase it now? In fact, it’s quite possible that your competitor’s wider range of services are being run at a loss to attract customers to their primary line of business. If so, covering their move in the market could be an expensive mistake.
- They offer a “premium” experience for a higher price. If you’re not doing so, then they’re not a competitor, just a neighbor selling something different.
- They may offer a “premium” experience for the same price as our regular services. This practice is called “buying customers.” The idea is that you offer an unsustainably low price to another business’s customers in order to get them to convert to being yours, then upsell them later or raise prices once your competitors are out of business. It’s a little scarier, because it can run you out of business if you don’t have a long term plan. But it’s unsustainable. Eventually, your “competitor” will have to make up for spending so much time as a “loss leader.” Unless they’ve got another plan to convert those customers to profitability, they’re selling a pipe dream. Instead, control your costs, stick to your knitting, and watch their costs overrun their business plan.
- Their pricing structure is different. If the problem is that a competitor’s pricing model attracting customers you feel you should have, ask yourself if you can sustain profitability using your competitor’s pricing model. If so, match it, then up the ante by throwing in something special that’s relatively inexpensive for your to provide: heated towels, free yoga mats upon initial membership signup, free membership in your Premium Rewards Program (whatever that means, but it sounds valuable!)…anything that won’t drive you out of business.
If, on the other hand, you’re doing a good job of controlling costs and can’t sustain profitability using your competitor’s pricing model, chances are they can’t either. If they can, they’re cutting corners, leaving something important out. You can spend time focusing on a “ping” for every competitor’s “pong”, or you can instead focus on the value you provide to your best customers–you know, the ones who actually don’t mind your pricing and see your business as unique and special. Spend more time taking care of those customers and try not to pay attention to tire kickers who cut and run as soon as you add fifty cents to the price of a pair of yoga pants.