Why your best customers leave you

You can’t make this stuff up.

A few months ago, one of our coaches was on a call with a customer. About a year earlier, this student had gotten advice that helped her make $35,000. This was their second time speaking.

“What’s going on?” her coach asked.

“Well, I’m up for renewal… but I’m not sure if I should sign up again!”

Think about that. As of this post, our coaching program costs $990 per year. She made $35,000, more than 30X what she paid. We’re talking about doing something that’s PROVEN to make multiple times her investment.

If you knew you could spend $1 and make back $3 (let alone $30), would you do it? Of course you would! And yet, when faced with whether or not to commit another year, she got squeamish.

The lesson: Even your best, most loyal customers won’t stick around forever. Even if you’re helping them make money.

This is really surprising. You’d think that when you helped people succeed they would be grateful and continue their engagement with you.

But this was one of our best customers. My team and I spent thousands of hours and millions of dollars to develop the material she was getting. And she’d gotten tens of thousands of dollars in cold, hard cash value from using it. And yet she wasn’t SOLD on continuing business with us.


The loyalty trap

As an entrepreneur, watching loyal customers leave can be incredibly painful. You give everything you can to provide value to your readers — free PDFs, new videos, blog posts, video transcripts, new call recordings…

Yet more than 99% of people will never buy. Or if they do, odds are they won’t buy again.

You’re left sitting there, alone, a single thought running through your mind: I’VE GIVEN YOU SO MUCH VALUE. AND YOU’RE JUST GOING TO WALK AWAY?

I remember getting bitter about this early on. I’d written my blog for 3 years, for free, and the first time I tried to sell a $4.95 product, people accused me of selling out. FOR FIVE DOLLARS?

What, do they want me to come clean their toilet and do their laundry? 

Getting bitter is not the right answer. That’s a long, dark road ahead of hating people for years to come. Actually, that sounds kind of fun.

It’s very easy to become angry and jaded when you’re giving away more and more material free — even helping people earn tens of thousands of dollars — and they don’t appreciate it. If you’re not prepared for this to happen, it can be one of the worst feelings in the world.

I learned this through a lot of pain, so I want to share the approach I finally took with you.

The answer starts from a misunderstanding of loyalty.

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How loyalty actually works

On a 1-on-1 level, we intuitively believe that if I, the business owner, help you, the customer, you’ll keep coming back. It’s a “covert contract,” or a contract that we have in our minds but never explicitly say.

On a larger strategic level, marketing “experts” have claimed that It’s cheaper to serve an existing customer than to acquire a new one. The conclusion: If you just keep your customers from leaving, you’ll earn more and spend less on marketing.

In actuality, both of these are wrong. Your customers might love your products. They might use them to improve their lives, make hundreds of thousands of dollars, or fall in love. But many of them will leave — for any number of reasons.

Also, the old adage, “It’s cheaper to serve an existing customer…” is true — but incomplete. The truth is, even your best customers will leave.

This is wrong. Even our best customers aren’t loyal. But believing they are sets you up to feel betrayed time and time again.

Customers aren’t loyal. And it’s a waste of time trying to convince them to be.

Intuitively, you and I know this is true.

Think about a store you used to go to. Back in the day, you loved it. But now, you just don’t go much any more. Maybe you had a bad experience. Maybe your tastes changed and you outgrew it. Or maybe the store got less “cool.” We all have places where we consider ourselves loyal, and one day we wake up and just say, “I’m not feeling it.” This is how loyalty ends: usually with a slow fade.

The same thing happens on a large scale to every business.

You would think that loyal customers would stick with you. It seems inconceivable that a customer who’s finding value would simply leave. In reality, almost all of them will leave.

Life changes. Priorities change. Competition changes. In reality, almost no one is 100% loyal.

Think of the brands known for having rabid followings, like Apple and Harley Davidson. In one of my all-time favorite books on marketing, How Brands Grow, the author reveals something surprising: Harley Davidson’s top buyers buy other brands twice as often as they buy Harleys! And Apple buyers were only slightly more loyal than customers of other top computer brands.

In other words, your best customers don’t just buy from you. They buy from other companies, too.

Fact: 87% of a brand’s customers don’t stick to just that brand. They’re promiscuous at best. And if they’re offered something better, they’re gone.

Who was loyal to Blockbuster when Netflix came along? And bookstores? Once it was cheaper/more convenient to order books off Amazon, people switched. Even in businesses with seemingly high “switching costs.”

Your most loyal customers aren’t as loyal as you think. Not only do they buy from other people, they’ll stop buying from you.

This is a hard fact to accept. Especially because it violates our intuitive sense of fairness, as well as the “loyalty” pablum we’ve all been fed. The truth is, you can’t simply run a business on loyalty forever.

For example, if you “froze” your business today and continued to provide amazing products to your customers, what would happen? Eventually, your business would die.

Loyalty is a powerful concept. But in order to sustain your business, you have to constantly find new customers.

When great results aren’t enough

Years ago when I was starting to grow IWT and hired Jay Abraham to coach me, his analysis of loyalty was one of the most counterintuitive things he shared with me.

We want to believe people are loyal. We want to believe WE are loyal. But we’re not. You can blame people for being disloyal or irrational, but it doesn’t matter. Human nature does not care about logic, it simply is what it is.

To be honest, this was the most counterintuitive thing I ever learned about business. It flies in the face of what everyone tells us.

I’ll show you an example from my own life. I was with my trainer for 5 years. That’s 3x per week I worked with him. Total quality time, no cell phones or distractions. That’s more time than I spent with almost anyone else. Put on over 20lbs of muscle and completely changed my life.

Didn’t get this one. Next time.

A post shared by Ramit Sethi (@ramit) on Apr 18, 2016 at 7:10pm PDT

Then one day, I woke up and decided it was time to move on. That was that. We’re still friends, but we don’t work together anymore.

It would have been easy for him to be bitter about that. Trust me, as a business owner, I’ve felt that way.

But the truth is, my goals changed. And because he’s great at what he does, it didn’t hurt his business to see me go.

So many entrepreneurs tear their hair out wondering why their best customers leave. Then they chase fruitless tactics trying to get them to stay — loyalty cards, adding more value, chronically over-delivering, when nothing you say or do will change human nature.

I’m sharing this with you now so you’re not one of them.

Please note what I’m saying very carefully:

  • Yes, loyalty matters. Having loyal customers is a massive competitive advantage that will help you scale a very large business. Just take a look at the math behind our 1,000 Top Customers.
  • You can build an army of loyal customers through attracting the right people up front, through multiple channels, and delivering incredible value through your products.
  • However, loyalty is not enough. Great products are not enough. In fact, even great results are not enough.

The answer: No matter how loyal your customer base is, it’s imperative that you become world-class at attracting new customers, forever.

I’m curious: Have you ever been super loyal to a business (or friend/girlfriend/boyfriend for that matter), then woke up one day and the feeling was gone? What happened?

If so, will you please share your story with us in the comments below? I read every reply.

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