The time and effort of trying to attract new customers could be used much more wisely, with Telstra highlighting a distinct gap between SME practices and consumer expectations.
According to the 2018 Telstra Small Business Intelligence Report, launched on Friday, 9 February, almost nine out of 10 consumers (88 per cent) will take their custom elsewhere if they believe a business is too difficult to deal with.
However, despite businesses fretting about declining customer demand in the year ahead, just 34 per cent of SMEs take proactive steps to re-engage lost customers, by finding out how they could improve.
It is this failure to look at converting customers already known to the business, and instead try to bring brand-new customers, that is putting a needless strain on business owners.
At a launch event at Telstra’s main Sydney office, Jen Geale, the co-founder of Mountain Bikes Direct, suggested that getting customer feedback is a misnomer, as it limits you to hearing from existing – and usually loyal – customers.
Instead, she said that her business shifted focus towards chasing non-completed sales in order to find out why prospective customers abandoned the transaction and what they could do to turn that around.
“We now send them a pop-up message saying: ‘Hey, what made you stop transacting with us?’,” Ms Geale said.
“Nothing motivates you more [to improve] than to sit with a customer using your product,” added fellow panellist Dr Sebastian Rees, co-founder of GenWise Health.
The main consumer complaints about businesses being difficult to deal with, the Telstra report suggests, are unsatisfactory assistance when dealing with an issue or complaint, the delivered product or service not matching its online descriptions, dissatisfaction with the final product or service, and poor value for money.
Core demographics can also have a marked impact on customer loyalty, with a separate survey by LivePerson finding that consumers of 45 years of age have twice the rate of long-term brand loyalty than their younger counterparts.
However, older consumers are also more likely to hold a grudge, with blacklisting much more common in older generations than millennials.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.