Customer churn and brand reputation:when a weak customer culture loses clients for good
By Enrico Giubertoni
Trusted by
Worldline
Alba Leasing
L'Erbolario
3M
Customer churn and brand reputation are tied together by one thing: how the whole company treats the people who chose it. Customer churn (the share of customers a company loses in a given period) rarely starts with technology. You can have the best tools and the most advanced platforms, and still lose customers to your competitors if your customer culture is weak. This article is for marketing, sales and HR managers who want to see where churn really originates and what it does to the brand.
Customer culture is a pillar of corporate culture, and it decides whether you retain or push away the people who chose you.
If this sounds like a slogan, let me prove it with a real episode, told to me by a participant in one of my management training workshops. The case shows how a lack of internal coordination and of attention to the customer can destroy the trust and the reputation of a brand.
When a customer says: never again
Imagine switching from one telecom provider to another.
While you migrate, you discover that an invoice that is not yet due has been passed to debt collection (the practice of handing unpaid invoices to an external agency that chases the payment).
Within a few days you receive a stream of emails and phone calls with reminders that look suspicious, so suspicious that you think of a fraud attempt. In the end you discover that your former provider started all of it, without warning you.
The result? A great loss of time, and above all trust destroyed. That customer will never return, and will become an active detractor (a person who tells the story to discourage others from buying), ready to tell it to anyone who is considering that company.
Why does customer churn happen?
It happens when each department looks at the customer from a limited perspective, without a shared vision. At the root of this crisis of trust there is a cultural problem.
Every function treated the customer as a number, without valuing the potential or listening to the signals. Here is how:
Administration sees the customer as a number, and a former customer as a second-class customer. The solution? Reduce the internal workload by passing even invoices not yet due to debt collection. “He is not a customer anymore anyway!” In this transactional view (where a relationship is only a series of payments) the customer loses value immediately, and with it the care and respect they should receive.
Customer service knew about the episode and kept it to itself. With more sensitivity, it could have alerted administration or proposed a personal intervention, and avoided a mechanical handling of the situation.
Sales concentrates almost exclusively on acquiring new customers and ignores the chance to retain or win back the customers who are about to leave. A departing customer is treated as a closed case, when it is an occasion for reflection and improvement.
Marketing is busy building the brand for new customers, with attraction strategies and new campaigns. The brand, however, is also the memory and the experience we leave with existing customers and with those we have lost.
Customers want to be won: this is the essence of your brand
When a customer finds a better service, they enter a relationship of brand love (an emotional attachment to a brand) with the new company and automatically become more critical of the one they left. Customers want to be won, again and again, and this is what a brand is made of: the way it behaves with those who are about to leave.
Customer churn and brand reputation: why customer culture comes first
Disappointed customers have extraordinary power. Every disappointed customer, including the one who never writes a review, talks about it in private and spreads the negative experience across all their networks. It is a cascade effect that no company can afford to ignore.
For this reason, training staff on customer culture is essential to reduce churn. Winning a customer, and keeping them, is an organisational process that takes time and recognises the value of every customer, both acquired and departing.
Why customer culture must be cross-functional
Cross-functional courses (open to people from every department) and workshops, designed for every team, build a mindset that goes beyond the single department. This is how staff start to see the customer experience as the common thread of the whole organisation, and understand the effect of each interaction and each decision on what the customer lives.
What causes customer churn, even with the best technology?
Technology is rarely the cause. You can have the best tools and the most advanced platforms, and still lose customers to your competitors if your customer culture is weak. Customer culture is a pillar of corporate culture, and it decides whether you retain or push away the people who chose you.
How can the handling of a departing customer damage brand reputation?
A participant in one of my workshops told me that, while switching provider, an invoice that was not yet due had been passed to debt collection. The reminders looked like fraud. The result was trust destroyed and one more active detractor, ready to discourage others from doing business with that company.
Why do company departments lose sight of the customer?
Because each one looks at the customer from a limited perspective, without a shared vision. Administration sees a number, customer service keeps cases to itself, sales chases new clients and marketing builds the brand for people who have not arrived yet.
How do you prevent customer churn with training?
By training staff on customer culture with cross-functional courses and workshops, designed for every team. People start to see the customer experience as the common thread of the whole organisation and to understand the effect of each interaction and decision on what the customer lives. Retention is an organisational process, and it takes time.
