Is Market Saturation Really the Cause of Customer Churn?

Last Updated on March 10, 2021

Customer Loyalty

There’s a lot of talk about how scarce customer loyalty is in the new economy. Many seem to believe that this is because there are so many options to choose from. They blame market saturation, comparison shopping sites and customer review sites.

What if there was another reason for the dramatic drop in customer loyalty over the past 10 years? What if it has less to do with your competition and more to do with the way customers are being treated?

In this post, I’d like to share two questions that will challenge your assumptions about customer loyalty in the new economy and challenge you to rethink the way you’re doing some things…

#1: How Are You Using Automated Technology?

FAQ pages, automated phone systems and recorded messages should be used to make our customers lives easier and more convenient. Sadly, this is seldom the case. More often it seems that companies want to route the customer to a process which will require as little involvement as possible from the company.

The company is using automated technology to make their lives easier, often at the expense of customer experience. As a consumer, this can make you feel that a company only wants your money. They want to make sure that you pay your bill and that you pay it on time. Other than that, they don’t want to be bothered.

This also means that an average company can make themselves exceptional, simply by using automated technology to help the customer solve their problem, but also make it easy for the customer to get help from a human being.

#2: Would You Recommend Your Customer Service Department to Your Mother?

The best answer to this question would be a resounding “of course!” Of course you’d recommend your customer service department to your mother, or your grandmother or your best friend.

But if you have your reservations, you can bet that you’re not alone. Your customers probably feel the same way, and maybe that’s why your word of mouth marketing isn’t working the way you’d like. Maybe it’s time to ask yourself why you wouldn’t feel comfortable referring a family member to your business and to make some changes.

#3: Is Your Company Vulnerable to Another Recession?

Whether another recession is on the way or not, this is an important question. During economic crisis, consumers are more likely to be cautious about who they buy from. They’re more likely to choose companies that will give them high value for their dollar.

If you have a reputation for delivering a high quality customer experience, a recession could work in your favor. You could literally watch your competitors go out of business while their customers (and would be customers) come to you instead.

How are you doing on these three questions? If you have customer churn, it probably has more to do with one of these questions than it has to do with market saturation. Find the holes in the boat. Plug them up and you just might find that market saturation isn’t the real problem.

Last Updated on March 10, 2021