The Top 50 Reasons Businesses Lose Customers

In today’s post, we are going to examine the top 50 reasons businesses lose customers.

You can use these reasons to develop a plan of action to keep customers coming back for more!

I am going to explain what I see as the top 50 reasons that customers are lost.

You may, or may not agree with each point, and that is okay; just please tell us why in the comment section at the end.

#50: Telemarketing

Over the last few years, telemarketing has gained a terrible reputation.

Many people are losing their patience with marketers tying up their phone lines, especially with the auto-dialers.

Customers have been leaving businesses that are using telemarketing techniques and moving to less pressurized businesses.

#49: Exaggerated Service Agreements

There is nothing worse than when you tell a customer upfront that if anything goes wrong you will have someone out to fix it in a certain period of time.

The customer has an issue and the business does send someone out… two weeks later than what they originally said.

Don’t expect any more money coming in from that customer.

#48: Noncompetitive Team

It normally takes a team to build a strong business.

That may include employees, partners, etc.…

If the team is not competitive, customers will go to the competition.

#47: Competition

Some businesses start with a plethora of competition.

An overload of competition can lose customers.

#46: Quality Control

If you do not have a strong grasp on your quality control standards, customers are apt to go to the competition.

#45: Company Policies

If the company mandates policies that are against the customer’s morals, they are apt to go elsewhere.

#44: Company Silence

There are times to be silent but there are times a business must speak.

Silence can drive customers away.

#43: Customer Needs

The primary goal of businesses is to solve customer problems and meet their needs.

If businesses do not meet customer needs, the customer will go to a business that will.

#42: Employee/Company Issues

While it may not affect the customer, when employees are in conflict with a business, the customers may go elsewhere to stay away from the conflict.  One disgruntled employee can cost a business a lot of money in lost revenue.

#41: Generic Sales Proposals

Sales letters and blog posts that are generic in nature can send customers to the competitor that is stepping up with high quality material.  All of your marketing materials should tell the customer EXACTLY how your product or service will help them solve their problems.

#40: The Talents and Abilities of the Entrepreneur

The CEO… The Founder is a backbone of the business.

Customers may be lost if that entrepreneur does not have the abilities that meet their needs.

#39: No Creativity

The creative businesses draw customers.  More than anything else, you need a creative way to stand out in the marketplace.

#38: Service Provisions

This goes along with #49, but holds its own.

Your service agreement might not be exaggerated, but certain provisions in the service agreement may drive your customers to the competitor.  Make sure your service agreement is clear and easy to understand.

#37: Not Innovative

People love innovation.

If your business is not being innovative but the competition is, the customers will flock to the innovative business.

Also, if your products and services are just like everyone else’s, people will only shop from you if you are the cheapest price.

#36: Contact Failures

If the business email is no good, phone disconnected or bad address in listings, customers will go elsewhere.  Make it EASY for your customers to get in touch with you.  Make sure you respond to calls and emails promptly.

#35: Relationships

We often write about how important building relationships is in gaining customers.

If you are not building relationships, the competitor will and you will lose.

Typically speaking, people like to do business with people they like, know and trust.  People don’t want to feel like a number or a means to an end.  They want the personal touch.

#34: Compliance Resolutions

This is a customer loss area that can be questionable and debatable.

A good example is a business not supporting gay marriage and will not recognize it, and many customers come who are in agreement.

Suddenly, new management changes the business to comply and the customers leave.

#33: Financial Management

If the business cannot manage its finances properly, it is doubtful it will keep customers.

One example would be if a business owed a customer a refund, but didn’t pay it promptly.

#32: Not Reading Customer Surveys

If business management is not reading and learning from customer surveys, the customers will start finding their products or services in other places.  Surveys are a great source of feedback about what is and what isn’t working in the business.

#31: Putting “All The Eggs in One Basket”

If customers see that you have one great product but no others and the competitor has a similar product that may not be quite as good, but they have multiple other products that are helpful, the customer is apt to shop with the competitor.  It’s good to diversify your product line, and give your customers several options to choose from.

#30: Negative Feedback

There is a common thing that happens with customers; if they have a good experience they will tell 1, 2 or maybe 3 people.

But if they have a bad experience, they will tell the whole world.

Negative feedback can destroy a business.  A few bad online reviews can destroy a business overnight, even if the reviews are lies and unfounded.

#29: Reprimanding Customers and Clients

Some companies actually speak negatively to their customers and clients.  They treat them like crap and then wonder why they stop doing business with them.  If there is an issue with a customer, by all means address it, but don’t forget the personal touch.  Follow the Golden Rule and you can’t go wrong.

#28: Not Offering Coupons

Discounts via coupons are a major thing with many customers.

If your business does not offer coupons, you ARE losing customers.

At a minimum, come up with a discount program for LOYAL REPEAT customers, and something for veterans and senior citizens.

#27: Perception

Right or wrong, how customers perceive a business can be the force that tells them whether to shop there or go to the competitor.

I suggest you use surveys to find out how prospects perceive your business.

Make sure your office is cleaned.  Make sure your employees are neatly groomed and polite.  Watch and see how your secretary answers the phone and/or greets people when they enter your business.

All of these little things make a big difference.

#26: Level of Service

We live in a high tech world, but people still want high touch.  I can’t speak for you, but I would rather shop at a place that provides world class customer service.  Remember that people don’t want to feel like a number.  They want a PERSONAL experience with your business.

#25: High Employee Turnover

If there are always new employees, customers will assume there is a problem.

Or, they may have liked a certain employee and will follow them to their new employer.

#24: Vague Information

If the information about the product or service is vague and does not answer the customer’s questions, they will go with the business that provides assuring information.  I suggest you have a frequently asked questions sheet about each product or service that you offer for sale.

#23: Not Measuring Metrics

As Chuck often says, “Numbers don’t lie.”

Measuring customer metrics can help a business find what works and what doesn’t work.

Businesses shouldn’t try to be all things to all people.  They need to carve out their niche and focus on them.

They also have to look at what’s working and what isn’t working and make the necessary adjustments as needed.

Lost customer reason #22: Staff Confidence

If a business’ staff is not confident, how can the customers be confident?

This means employers need to hire QUALITY employees and they need to make sure these people are trained properly, paid well, and recognized for their efforts.  Happy employees will do more and will make the customers happy.

#21: Reminding Prospects and Customers of Successes

Just simple newspaper clippings and awards on the walls of businesses, or listed on the website can make a huge difference in customer retention.

Keep business successes up-to-date and easy to see.  I like to call this third-party validation.

#20: Following Up

It means a lot with customers when a business or entrepreneur just contacts them with a “Hi, how is everything?”

Just a simple follow up with customers can mean a lot.  The money is in the follow up.

Most businesses suck at staying in touch AFTER the sale.  In my opinion, staying in touch is the best way to create a long-term, loyal customer.

#19: Communication

Many of the listed reasons businesses lose customers fall into the communication category, but I still had to list this as a reason.

If you cannot communicate with customers, they will go elsewhere.  You need to communicate by phone, email, direct mail, text, social media and any other platform you can think of.

You can never communicate too much!

#18: Poor Response

This goes along with the communication reason…

Poorly responding is a huge reason that customers will leave businesses.

#17: Being Inconsistent

Consistency is quite important for a business.

No matter what is inconsistent in your business, it can drive customers away.

Customers want a CERTAIN experience when they do business with you.  More importantly, they want the SAME experience each time they do business with you.

This is one of the reasons that franchises are so successful.

#16: High Pressure Sales Techniques

High pressure doesn’t work!  Customers do not want pressure.

Yes, you might get a quick sale from it, but it will do more harm than good.

Ideally, you want to be a consultant, rather than a salesperson.

Focus on educating your customers and helping them solve their problems, rather than hard selling them.

#15: No Incentives

Businesses that offer incentives to customers have, and keep more customers than businesses that do not offer incentives.

Each marketing message should have a time sensitive deadline.

You should also offer discounts for loyal customers.  You could also create a referrals program.

The bottom line is to give people a reason to do business with you.

#14: No Flexibility

Being slightly flexible can make the difference in keeping a customer and losing a customer.

“The sale ends today at 3PM.”

Customer: “But I get off work at 3 and cannot be there until 3:20”

Entrepreneur: “I can hold the sale until 3:30.”

The customer will remember that flexibility.

#13: A Problem Experience

The customer had an issue and the experience was terrible.  AND YOU DO NOTHING TO FIX IT!

It is doubtful they will come back and it is VERY LIKELY they will tell everyone they know about their bad experience.

#12: Advertising Methods

Depictions and images on advertisements and even the words used can drive customers away.

While a half-naked woman may bring a certain class of customers, you may be driving other customers away.

You may want to highly consider your ads.  You also want your message to be consistent.

Figure out who your best customers are.  Once you do that, figured out the marketing mediums they use, such as magazines, the local newspaper, radio, or television.  Finally, keep your message consistent and share it frequently.

Think about the Marlboro Man for a minute.  Marlboro has been using the cowboy for nearly 30 years now and they haven’t changed their image!

#11: SEO

SEO stands for search engine optimization.

If customers cannot find you on the internet, they will go to the competitor they can find.

Having a website is just the starting point.  You need to make sure it shows up high in the search engines, especially when people do their Google search.

#10: Advertising Campaign Spending

It takes money to make money.

Businesses need to budget for advertising campaigns.

If the business is not investing enough in advertising and marketing, they will lose customers.

#9: Not Apologizing

It is amazing what the words I am sorry can do.

If you make a mistake, admit it quickly and fix the situation.

#8: Not Asking for Referrals

Nearly every customer knows someone else that could become a customer, but they won’t tell you unless you ask.

You are leaving money on the table by not asking for referrals.

Even better, pay your customers for referrals by creating a referral program.

#7: Hidden Fees

I know I have left multiple companies because of hidden fees.

By being upfront with customers immediately about all fees, you will have customers that stay.

If you have fees of any kind, make sure your customer knows about it ahead of time.

#6: Business Appearance

This is a no-brainer.

If your business looks clean and trustworthy, customers will come and stay.

#5: Trust

If prospects and customers do not have, or lose trust in the business, they will find a business they can trust.

#4: Lack of Courtesy

Again, this is a no-brainer.

If you or your employees are not courteous to even the most difficult customers, they will go where they are treated well.  Treat customers as well as you would treat your best friend.

#3: Satisfaction

Satisfaction is a top reason.

Do what you can to keep your customers happy.  Talk to your customer.  Give surveys.  Stay in touch and follow up AFTER the sale.

#2: Discrimination

Discrimination comes in many forms.

I will not describe all the various forms of discrimination, but if your business is treating certain people better than other people, you are losing customers.

#1: Pricing

This is, of course the top reason customers stay or go.

And what many people do not consider is that items priced too low can drive away customers just as much as products priced too high.

You want to have competitive pricing to keep customers.

You don’t have to be the cheapest in town.  Not everyone shops based on price.  You can justify higher prices if you provide great customer service, have flexible business hours, and give your customers a great buying experience.

Final Thoughts

What do you think about this list of 50 reasons businesses lose customers?

Did I leave any off the list? Can you add any more?

I hope these will help you consider your business structure and make changes that will help you keep and attract customers.

If you have any comments or questions, you can leave them below.


  1. Three Big Reasons
  2. Small Businesses
  3. Losing Customers
chuck holmes


Chuck Holmes
Network Marketing Professional

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