The Real Reasons Customers Leave (and What to Do About It)

Anyone who works in business selling "something" has faced the question: whatever happened to...?

You know the situation - an account has gone silent. Some businesses call them lapsed accounts, inactives, lost customers, churned customers, sleepers. We could devote an entire article just to collecting the names. Whatever term your business uses, it represents an opportunity that's gone cold.

Here's what makes this critical: We all know that it is significantly more expensive to acquire a new customer versus retaining an existing one. Depending on which research you consult, the cost can range from 5 to 25 times higher to bring in new business. That's why understanding these lapsed, lost, cold, churned, sleeper customers isn't just important, it's essential to your bottom line.

The guessing game that costs you money

In most businesses - including ours at IMI - there can be a laundry list of reasons why customers stop buying. Is could be a price thing, a product quality issue, a sales/customer support issue, delivery concerns, maybe they left for a competitor, or it could just be a procurement decision.

The reality is that most of the time we just don't know what the reasons are, we're guessing. We're guessing because we don't want to reach out to find out, or even when we do reach out, there's no response. And that uncertainty leaves opportunity on the table.

Stop guessing. Start measuring.

So what can you do? One proven approach is using a third-party vendor to reach out on your behalf. This methodology transforms unclear situations into actionable intelligence.

Depending on the number of accounts you're dealing with, you can either:

• Identify specific reasons why individual high-value accounts left

• Group responses into themes to understand broader patterns across your customer base

• Quantify the reasons to prioritize which issues to address first

Once you understand the general reasons, you can make the changes necessary to win that business back. But here's where it gets interesting. When the data surprises you Sometimes you will discover - like in the example shown in the accompanying chart - that it's nothing you've done at all. Instead, customers have simply stopped using that product category entirely. They're not buying from anyone. In this example from actual research, when customers who stopped purchasing were surveyed:

• 71% had internal reasons (too much in stock, no longer needed the product)

• 22% made vendor specific decisions (internal vendor changes, consolidation, procurement switches)

• Only 17% cited price concerns as the reason for leaving

• Just 16% mentioned service issues and 13% had product-related concerns

• A mere 4% left due to brand perceptions

Think about what this learning means for your business/customer strategy. If you had assumed price was the issue and started discounting across the board, you'd be solving the wrong problem. You'd be leaving money on the table and potentially devaluing your brand, all while missing the real story.

The investment that pays for itself

Decisions are often based on assumptions that people are “hearing” in market rather than actual data. They change pricing structures, rebrand products, overhaul sales approaches, or modify service delivery, all without understanding whether these were actually the reasons customers left.

Taking a bit of time to do some research on your customers can help you get clarity instead of guesswork. You might discover there's nothing wrong with your offer and that there was really nothing you could do to get certain customers back. Or you might uncover critical issues with product quality or service delivery that are driving customers to competitors. Either way, you'll know where to focus your resources for maximum impact.

Your next step

Understanding the reasons behind customer lapse is worth the investment. The alternative - making strategic decisions based on assumptions - is far more costly.

At IMI, we specialize in turning uncertainty into actionable intelligence. With our proven track record in market research, we help businesses understand not just what customers are doing, but why they're doing it.

Ready to stop guessing and start knowing? Contact us to start the conversation about understanding your lapsed customers.