Are You Pushing Customers Away?

Since the start of the recent recession, many businesses have tightened their credit policies so that only the best-rated customers get payment terms. Everyone else has to pay cash.

Sure, it makes sense to hold down unnecessary costs and avoid risk. But have they bothered to figure out whether net profits are up or down as a result?

I’m willing to bet that, at the end of the day, tight credit policies are costing tons of money in missed sales.

Losing Repeat Business… Forever

And that’s just one example of how businesses like yours are pushing away customers. Mostly, it’s done in an attempt to limit expenses. But it is almost always shortsighted.

Once you push away those customers, they are pushed away forever. They never come back to make ever-more-valuable repeat purchases.

So let’s take a look at some of the other ways you might be making it hard for customers to buy from you.

1. Limiting Payment Options

I like to eat at a local place that serves a fabulous Mediterranean frittata with a wild greens salad. But they only take cash. It makes me think twice about bringing people there. And I never go with a big group. Who wants to peel off $300 in cash for breakfast? Yes, they save the transaction fee that credit card companies would charge them – anywhere from 1.9% to 3.5%. But what about all the lost business?

Almost as bad are places that accept only one or two types of credit cards. But the list of widely used credit cards is not long. So why on earth would you not accept ALL of them?

Maybe American Express charges you 1% more than Visa or MasterCard. But suppose a customer doesn’t have Visa or MasterCard…or suppose they buy everything on Amex to get the frequent flyer points. It doesn’t make sense to lose that customer’s business in order to save 1%.

Even worse are the small online businesses that accept only PayPal. That is just nuts. I estimate it cuts into their sales by 30%-50%.

Wake up! You’ve worked hard to attract those customers. So make it easy for them to give you their money!

2. Unreasonable Shipping and Handling Fees

I’m not sure who online vendors think they’re fooling when they add $28 to ship something that can’t possibly cost them more than $4.95 to deliver. When I see that tactic, I ditch the website.

Automated shopping carts make it easy for you to give customers a choice of shipping methods tailored to their needs and their budget. Better yet, do what Zappos does and ship for free. More and more e-tailers are doing it, and those who don’t will get left behind.

One of the reasons often cited for Zappos’ incredible success (and $800 million sale to Amazon) is their free shipping, even on returns. And get this: Choose the free shipping option and they still send it overnight. Now that’s service.

3. Making It Hard for Customers to Find What They Want

If your customers can’t find what they want quickly, they’ll go elsewhere.

So if you have an online store, give customers a search box on every page of your website. Plus, since your “shelf space” is infinite, make sure every possible product pops up for every appropriate search term.

If you have a brick-and-mortar store, organize it with your customers in mind. Use big readable signs, along with on-shelf labeling. Scatter specials around the store, positioning them directly in the flow of traffic. (Supermarkets are great sources of inspiration for this. Study what they do. And copy it.) And train your staff to ask shoppers, “How can I help you?” instead of “Can I help you?”

4. A Complicated or Confusing Checkout Process

My local Ralphs grocery store is great at merchandising. But now they’re pushing automated checkout, and it doesn’t work very well. The electronic scanners are clumsy and inefficient, and when they bark “Place the item in the bag,” it sounds rude. Plus, it’s impossible to pay for self-serve items from the “olive bar.”

But I was in the new Fresh & Easy market the other day, and they’ve rethought the whole process. Everything that doesn’t work at Ralphs works beautifully here. So I know it’s possible to get it right.

Online, my problems are different. Sometimes, it’s hard to find the “Checkout” or the “View My Cart” button. Sometimes, my order information is lost when I accidently hit the back button. And sometimes the shopping cart can’t handle dashes in my phone number. What’s wrong with dashes? And why can’t the system save things in my cart for a day? Or even two? When I get interrupted, I have to start over again. How frustrating. How inconvenient. (Amazon saves things in your cart… forever.)

Did you know that 70% of all orders started online are never completed? Put some thought into improving your checkout process, and the payoff could be huge.

5. Faxing in the Age of the Internet

This one is hard to believe, but more common than you might think.

I wanted to purchase a vitamin supplement from a company in New York. But turns out the only way to do it was to print out their order form, fill it out by hand, and fax it to the company. Fax… can you imagine! How much more business could this company do if they operated as if they were in the 21st century?

A Few Other Mistakes You Might Be Making

The last thing you want to do is irritate your customers in any way. So, consider these questions…

  • Are your business hours long enough? Early enough? Late enough?
  • Do you have enough staff for the volume of shoppers?
  • Is your customer service line responsive?
  • Are your on-hold times out of whack?
  • What about your toll-free phone numbers? Easy to find? Prominently posted?
  • Is your phone tree a button-pushing nightmare? (“Please listen carefully because our menu has changed.”) Don’t waste my time. Just tell me what I need to know. And ALWAYS give me the option of talking to real person instead of a machine.

Take a hard look at the steps your customers have to go through to make a purchase. Where do they get hung up? Where is the process harder than it needs to be? Find those sources of irritation and reduce or remove them.

And don’t stop there. Make it your mission to continue to make the buying process easier and easier for your customers. They will reward you with their loyalty… and their money.

[Ed. Note: Paul Lemberg has worked with hundreds of entrepreneurs and small-business CEOs, as well as dozens of executives from Fortune 100 companies. His business growth courses are used by thousands of entrepreneurs around the world. Paul is the author of the bestselling book Be Unreasonable. Visit his website to download his new free video course, “The 7 Master Keys to Rapid Business Profits.”

Paul’s “Marketing Money Magic” system is a detailed, hands-on toolkit that walks you through the entire marketing process. You know exactly what’s on your customers’ minds and the hottest hot buttons that literally compel them to pay attention. It sells for $197. But for a limited time, Early to Rise readers can purchase the “Marketing Money Magic” system for only $67. Use promotion code ETRMM1105. Offer good until May 9. Get the “Money Marketing Magic” system at this special price.]