Many customers eventually switch brands, transitioning from one business to a competitor to serve their needs. As a customer, this is simply an exercise of your choice in a free market; you can capitalize on better prices, better service, or other factors to better suit your needs. But as a business, this can be devastating. Losing customers to a competitor can eventually weaken, and possibly destroy your business.
So why does this happen? And what steps can you take to stop it?
Why Customers Switch Brands
- 1 Why Customers Switch Brands
- 2 Bad overall customer experience.
- 3 Lower prices.
- 4 Unmet needs.
- 5 Location and convenience issues.
- 6 Brand fatigue/innovation.
- 7 How to Prevent Brand Switching
- 8 Get to know your customers better.
- 9 Stay price competitive.
- 10 Offer rewards for customer loyalty.
- 11 Invest in customer experience at every stage.
- 12 Innovate and reinvent yourself.
- 13 Get feedback and keep improving.
These are some of the top reasons customers switch to a different brand:
Bad overall customer experience.
First, and most commonly, the overall customer experience is lacking. “Customer experience” refers to the sum total of encounters and impressions a customer has with a brand. It includes their first impressions of your brand, the experience they had being onboarded, and their ongoing experiences with every order they place. If this customer experience is lacking, or unfavorable in any way, it’s going to push customers to leave and seek another brand.
You’ve likely experienced this in your own life; if a brand offers a similar product at a lower price, you’ll likely turn to it. You wouldn’t buy a bag of 30 marshmallows for $5 when you could buy a bag of 50 marshmallows for $4; accordingly, if you have a competitor who straightforwardly outcompetes you on price, you can expect to lose some customers.
Sometimes, customers leave because they have needs that simply aren’t being met. They’ve been satisfied working with your agency for many years, but they’re ready to scale, and you simply don’t have the resources to support their level of growth. If a competitor is able to promise something you can’t, your customer will (perhaps rightfully) leave.
Location and convenience issues.
Customers sometimes switch to a different brand because of location or convenience issues. This is most often seen with brands that have a physical presence; for example, if a customer is used to a certain grocery store because it’s only a few minutes away from their home, they may switch to a different grocery store when they move to a new location.
It’s possible for customers to get “tired” of your brand, especially if they’ve been working with you for a long time. However, this tends to only happen when the brand fails to innovate; you haven’t offered any new products, new services, or new ways of doing things for years. If a competitor has something new and exciting, your customers will have even more reason to switch.
How to Prevent Brand Switching
Fortunately, there are several strategies that can help you reduce the tendency for customers to switch brands:
Get to know your customers better.
First, spend the time and effort to get to know your customers better. If you’re not sure why they’re leaving you, you haven’t done a good enough job in this area. If you know your customers well, you’ll be able to anticipate their reasons for leaving and specifically prevent them. Use preliminary market research and ongoing surveys to learn more about their needs and how they feel about your brand.
Stay price competitive.
Though you may struggle with this against a fierce competitor, do your best to stay price competitive. If a competitor undercuts you, you’ll have a harder time keeping your current customer base—even if you offer an exemplary customer experience.
Offer rewards for customer loyalty.
Give your customers a reason to stay with you. Depending on the nature of your brand, you can offer long-loyal customers discounts, freebies, or special treatment to encourage them to stick around.
Invest in customer experience at every stage.
No matter what, you should be investing in your customer experience at every stage of development. Your customers should have a fantastic first impression of your brand, they should be welcomed into your brand community with open arms, and they should receive the best customer service you can afford at every step in the process.
Innovate and reinvent yourself.
While there’s a good case to keep your brand consistent, you should also occasionally experiment and innovate. Add new products, services, or features to keep your customers interested, and occasionally reinvent yourself to stave off-brand fatigue.
Get feedback and keep improving.
Finally, collect information from your current customers about what you could be doing better and what they currently want or need. Use this feedback to keep improving continuously.
It’s impossible to stop 100 percent of brand switching events, but with the right strategies, you can considerably reduce your losses in this area. The more you invest in your customers, the more likely they’ll be to stay with your brand indefinitely.