Death by a Thousand Nicks: What Former Customers Can Teach You About Customer Retention

Are customer retention issues killing your fitness or wellness business?

We’ve all heard the old saw that it’s cheaper to keep customers than it is to get them. So why is customer retention such a problem for many fitness and wellness businesses?

The truth is, there’s no One Big Reason.

Unless they’ve de-prioritized their own fitness — and that’s possible — customers leave your business because of an accumulation of small unpleasant experiences. Only rarely does a single awful experience immediately end the customer relationship. It’s the buildup of a thousand small wounds that kills once-good customer relationships. Dirty towels on the floor of the locker room. Non-functioning equipment. Front desk staff who can’t look up from texting.

When customers have had enough, they leave. We don’t value them until they’re gone, and in doing the post-mortem, many business owners and managers make their second biggest mistake, not talking to their former customers.

When you lose a customer, you have a magic opportunity to get an honest evaluation of your business from someone you already know. And they’re the cheapest and best source of that information. Why guess at how to improve your business? Your former customers would love to tell you what you can do better. Then you know what to fix.

Real life example: Telltale signs that a problem is brewing

A Radial client suffered from high customer turnover. One former patron said:

1. After five years, the receptionist still asked for ID when she paid by check or credit card. Why? They had five years of her purchase history in the computer. Couldn’t they also see that she had never bounced a check? And why, after five years, did the staff still not recognize her? Many of them had been there just as long.
2. Frequently, while receiving spa services, the technician working with her would talk up a storm with the adjacent employee, often forgetting to continue the spa service when she got to the juicy bits of her story.
3. Fancy video monitors installed two years ago when the shop first opened quit working within months. They’ve never been fixed or removed, so now customers stare at test patterns and listen to static in the waiting room.
4. When she called to schedule an appointment, she was inevitably immediately put on hold for several minutes. There never seemed to be a good time to call.
5. When she stopped to pay her bill on the way out, the receptionist inevitably would answer the phone while simultaneously handling her transaction, or stop to answer someone else’s question. Often she’d complete the transaction and the only verbal interaction she would’ve had with the front desk staff was the abrupt question: “Name?”

The final “nick” that killed this relationship: She arrived for a 1 p.m. appointment. She waited… and waited… for over 45 minutes. No one ever explained the wait, nor had they warned her when she arrived that they were running late. She finally walked up to the counter and told them she’d have to leave – she couldn’t wait any longer. She got no apology, no thank you for waiting (say, a coupon for free service), and no offer to immediately reschedule. The receptionist simply said “OK” and immediately turned to the next task.

Our 8-step plan for improving customer retention

1. Get a list of former customers. Call them personally. Don’t delegate this job to the lowest-paid, most junior employee. This discussion deserves management attention.
2. Don’t further alienate them by sending generic comment cards, surveys, and questionnaires about why they left. First, these tools all reflect your preconceptions about why customers leave. Second, filling out forms frustrates customers who really want to give you detailed feedback. You’ll get insights cheaper and faster simply by talking to them.
3. Have a couple of questions in mind to get the conversation started. Don’t limit yourself to predefined questions, however. Your goal is to have a real discussion about what went wrong. Believe us, they will love to be asked and they will want to tell you, in detail. Take notes.
4. At the end of the call, summarize the issues you heard the customer describe. Reassure the customer that you really listened by restating your understanding of why the customer chose to take his or her business elsewhere. For example: “When we put you on hold repeatedly, you feel like we don’t want your business.”
5. Truth is good. Emphasize that you take the issue seriously, but don’t automatically commit to fix all problems. You’ll discover that some issues do indeed need to be addressed, and some don’t. If you’re not sure what you’re going to do about a particular issue, say so. No empty promises, please!
6. Don’t blame your employees or explain away a problem to a customer by criticizing your staff. You’re responsible for the business. If you’ve hired people who aren’t effective, it’s your responsibility to fix that. Perhaps you need to improve your hiring practices, provide training, or give employees additional resources so that they can perform well.
7. Don’t insult unhappy former customers by flinging discount coupons at them. Instead, offer them your sincere appreciation for their feedback. Tell them that you’re committed to improving the business so that they will be pleasantly surprised if they decide to give you another chance. If you do make business changes as a result of their feedback, notify them and consider offering a coupon for a free — not discounted — service or product. Offering a discount that they can only use if they buy more goods or services from you simply makes them angrier.
8. After you’ve completed several calls, review your notes. Look for trends and common themes. Decide which issues should be addressed. Make these a priority and include your staff in developing plans to fix them. Look for root causes, not just symptoms. For example, if you made better hiring decisions perhaps additional training wouldn’t be necessary.