How many customers has your business lost in the last 6 months? You may not consider this an important metric to measure and you are not alone. Yet, understanding why customers leave provides valuable insight. It might be too late to get them back, but it can inform measures to prevent others from following the same path.

The majority of organisations are keen to grow their customer base. If you have that goal, you likely invest time and resources to extend your reach and acquire new customers. To tempt new customers, you might use favourable introductory rates and incentives. Equally, your team might get rewarded for encouraging new customers across the line. Therefore, they are energised and motivated to provide responsive and personalised services.

However, all of this effort only grows a customer base if you are not losing existing customers at a similar rate. Unfortunately, a lot less effort and fewer resources are directed towards retaining long-standing customers. It’s as though there is an assumption that once onboard, they will remain loyal. And, when they become disengaged and leave, little thought is given to why.

No matter how fantastic your products and services are, some customers will leave. A change in their circumstances may simply mean that your offer is no longer relevant or a priority. However, there will also be customers who leave because they are disengaged.

The reasons that customers become disengaged include:

  • Not being able to easily access products or services
  • Expectations have not been met – possibly due to unrealistic promises to win them over
  • Discontinued products or services with no viable replacement
  • Poor experiences, such as interactions with unhelpful or rude staff
  • A mismatch of values, possibly due to a disconnect with current customer needs
  • Poor communication – not feeling informed or being bombarded with irrelevant information
  • Lack of support when facing vulnerable circumstances

It may simply be that in the excitement of winning new business, you’ve gained a ‘poor-fit’ customer. By that I mean someone far outside your target audience whose needs you are ill-equipped to serve.

It may not seem important to hear the views of disengaged and lost customers. They’ve gone, so let’s move on. However, they offer a valuable perspective on your business. By inviting their feedback, we gain insight into what has gone wrong and how this might be rectified.

The initial feedback might be anger, driven by disappointment or frustration. Yet, if you actively listen, apologise and ask specific questions to better understand the situation, lessons can be learnt. You might start to recognise patterns, such as:

  • A large exodus following a process upgrade, such as a switch to app-based services
  • Mis-aligned expectations when customers joined as a result of a specific advertising campaign
  • Dissatisfaction as a result of interactions with a specific employee, department or branch

The July deadline for implementing Closed Product Consumer Duty is approaching and the latest FCA CEO Letter* highlighted 5 areas for firms to address. One of these points is ‘gone-away or disengaged customers’. It’s a point that has been raised in recent Q&A sessions.

So, for financial institutions, there is no time like the present for focusing attention on why customers leave. And, even if you are not a regulated organisation, this insight can inform positive change.

I suggest we think of our customers as a valued part of our community, rather than ‘them and us’. As such, we should actively listen as much as we push our message. That requires the sufficient allocation of resources at all customer touchpoints to ensure quality interactions. Customer services should be accessible, responsive, timely and personable at all times. What’s more, processes to record, analyse and use feedback to inform change need to be in place.

I’m confident that when we put effort into understanding and responding to evolving customer needs, we give customers reasons to be loyal. Their renewals, reviews and recommendations will help your profits, extend your reach and grow your customer base.


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About the author.

Helen Pettifer FRSA.

Helen Pettifer is Director of Helen Pettifer Training Ltd and a specialist in the fair treatment of vulnerable customers.

She has a background in call centre management and is committed to customer service excellence. Her training ensures front-line staff gain the awareness and resources to confidently identify and respond to signs of vulnerability.

Helen Pettifer is a British Standards Institution (BSI) associate consultant for BS 22458: 2022 Consumer Vulnerability, a Mental Health First Aider, a Suicide First Aider, a Dementia Friend, and a Friends Against Scams Champion. Recognised as a changemaker, she was invited to become a Fellow of the Royal Society of Arts in 2022.

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