The majority of customers leave because of poor service, not price.
We’re starting this article off by not trying to sugarcoat the issue at hand. If you’re noticing a higher turnover rate in clients, it’s likely not because of a small price change. It can be a hard pill to swallow, but ignoring reality can be a costly mistake when trying to fix the issue.
Switching suppliers isn’t only inconvenient for your company, but also the buyers’ company. So, what is happening that would cause the buyer to put themselves through this hassle? And how can you prevent this? Take a look at the top 4 reasons buyers switch suppliers, along with helpful tips to avoid these mistakes.
Top 4 Reasons Buyers Switch Suppliers
1. To Solve a Problem
At the end of the day, it’s just business. And that’s what buyers have in mind when they need to solve a problem. A top reason many choose to switch suppliers is because they are not able to receive their usual orders. This results in a problem needing to be solved and a supplier who cannot fulfill that.
Example of Why Buyers Switch Suppliers:
The company Good Finance is running low on its coffee supply. They ask their supplier why the order is running late on delivery, and the supplier shows up the next day. This is great, but when they arrive, they let the company know many of their favorites are out of stock and give them orders they did not ask for. Unhappy and now with a problem, the business finds another coffee supplier that is available and can offer a wider range of office coffee supplies.
Supplier Takeaway
Some things are out of your hand, but not always. Are you familiar with the phrase “under promise and over deliver”? It’s a common tactic in the sales and customer service industry, and with good reason. It’s the concept of giving your client more than you initially promised to delight them and make them feel like they are valued. This is typically what suppliers do initially and then stop once they are comfortable with their client relationship. That’s when another company can jump in and overdeliver.
Consider the example we gave about products being out of stock. If they’ve had this client for years, and knew their busy season, then shouldn’t the supplier have over-delivered? If a buyer has been good to your business and a solid partner, couldn’t you offer a wider range when you see they need it? It’s easy to think suppliers switch just because you were out of stock once, or the competitor prices were lower. But it comes down to you not putting in the work to make the buyer feel valued. Make their problems your problems. And make their success your success.
| Tip: Manage the expectations of clients and continue to overdeliver. |
2. Lack of Communication
How do sales start? With communication. Most deals are made by having two parties communicate and articulate their vision and what can be done. Relationships are built, and trust is gained. So, what happens when the customer signs on and communication diminishes over time? They turn to a new company. If a customer feels like there are no touchpoints, the company they pay money to doesn’t know their goal, and they feel helpless, they will turn to outside avenues that can make them feel seen. Likely the new company will provide lower, if not the same service, but the communication will make it worth it on their end.
Example of Why Buyers Switch Suppliers:
The business Happy Physician is doing good after outsourcing their medical billing services, but they have not heard from anyone at the company for 3 months. The practice is receiving reports, but aside from that, it feels like they are talking to a ghost. Their business does not feel connected to the company aside from their service. Because of this, they decide to keep their options open and see what else is out there
Supplier Takeaway
Do most of your interactions with current clients focus on getting them to leave you a review, upsell them, or give them a report? If so, this is the first sign you have lost actual communication with the client. Ensure your customers are receiving check-ins once a month. This assures your customer feels heard, and you can better manage their needs and expectations.
| Tip: Monthly Client Call or Email |
3. Poor Service
If you’re not delivering the service you promised, buyers will switch providers in a heartbeat. Three of the most common poor service examples in the supplier industry that will cause fallout are missed deliveries, poor communication, and mistakes. We have already discussed communication, so let’s focus on missed delivery and mistakes. When it comes to the two, they are the definition of poor service in a buyer’s mind. They trusted you with a task and are now in a bind because you didn’t deliver the service you promised. Poor service is a surefire way to send a buyer to a competitor.
Example of Why Buyers Switch Suppliers:
Corey’s Copy Shop is having an issue with one of their machines. They booked a service appointment ahead of time, but on the scheduled date, nobody showed up. They need the job done to continue their business. So they look elsewhere to get the job done in the timeline they need.
Supplier Takeaway
Mistakes and delivery changes happen, but if it becomes a habit, your client will not be so forgiving. Make sure you are delivering the quality service you promised.
| Tip: Do what you say you will do, and deliver on your promises. |
4. Cost
Although cost isn’t the leading reason buyers switch suppliers, it is vital to mention it. In fact, according to Forbes, 58% of surveyed customers said they’d pay MORE if they knew they’d receive great customer service. We digress. Even though this is the case for many, it’s not the case for all. With inflation on the rise, many businesses are looking for ways to cut costs.
Example of Why Buyers Switch Suppliers:
Every year, Lisa’s Fashion Store orders storage containers from the same supplier to prepare for the holiday season. This year, they are dissatisfied with the increased price of something they’ve bought for years. Although they are happy with the service, they must keep their options open because of rising inflation. They find another company with a good reputation and a lower cost and decide to switch.
Supplier Takeaway
It’s not easy these days even with problem-solving, good communication, and exceptional service, you can still lose customers when it comes down to cost. According to MetLife, 85% of small business owners say they are concerned about the impact of inflation on their businesses. That being said, many have to take a close look at their business’s finances and see where they can make cuts.
| Tip: Be Transparent. The worst thing your business can do is raise prices without warning or a good message behind it. Your buyers are also increasing their prices, so they understand. Still, if you’re raising prices while competitors aren’t, there’s a problem. Be open and honest about the cost and remind customers of your excellent service. |
The Switch: How Do Buyers Switch Suppliers?
While researching supplier companies that service their area, buyer’s often come across price quote companies that offer multiple quotes for what they’re looking for. These companies make it easy for the buyer by matching them with ideal suppliers in their geographic area that offer the exact products or services they’re looking for.
Step-By-Step Breakdown:
Step 1: The buyer chooses the product or service they need.
Step 2: They receive information on the service in general.
Step 3: The buyer fills out a detailed form on what they’re looking for.
Step 4: They receive up to 5 supplier matches with FREE price quotes.
Step 5: They make the switch.
How to Gain & Retain High-Quality Leads
When you partner with an online marketplace, your supplier business is paired with companies looking for your specific products, services, and pricing. Meaning when matched with a prospect, they are an ideal fit for your service. This match makes it easier to retain the lead (granted you are providing them with the quality service and communication we mentioned earlier).
Ready to Get Started?
At 360Connect, we connect suppliers like you with targeted, true-intent leads requesting quotes for your products and services. If you’re ready to improve sales and grow your business, sign up today!