Loss of Customer Base
The company's consumer base shrinks when the number of its customers who have gone to competitors grows faster than the number of new and returning customers, and the total loss exceeds the tolerable threshold. The formula for this scenario is as follows:
Customer base shrinkage = (outgoing customers - new customers - returning customers) > threshold
This formula describes the ratio of the four components that determine the market share occupied by the company: the arrival of new customers, the return of previously lost customers, the departure of customers to competitors, and the tolerable threshold for shrinkage of the company's customer base. How can these components change due to the purchase of goods on the terms of the seller?
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Flow of outgoing customers increases
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The arrival of new customers decreases
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The return of old customers is reduced
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Tolerable threshold decreases
Why would the threshold be inevitably exceeded?
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Flow of outgoing customers exceeds threshold
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The arrival of new and return of old customers is reduced to almost zero
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Tolerable threshold value decreases to almost zero
What questions should the seller ask?
When you buy our product on my terms:
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How much the number of outgoing customers increases? (name and rate the amount of outgoing customers)
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How much the arrival of new customers decreases? (name and evaluate the reduction in the number of new customers)
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How much the number of customers returning to you decreases? (name and evaluate the reduction in return)
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How is the acceptable threshold for reducing the customer base determined? (name and evaluate the threshold value)
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Why would the number of outgoing customers increase?
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Why would the arrival of new customers be reduced?
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Why would the number of returning customers decrease?
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Why could the acceptable threshold for shrinkage of customer base be reduced?
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Why do you think that customer care would exceed the arrival of new and the return of old?
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Why do you think that the arrival of new customers would fall to almost zero?
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Why do you think that the return of old customers would fall to almost zero?
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Why do you think that the tolerable threshold could be reduced to almost zero?
Damage | Threats and Their Scenarios | Loss of Relations, Image and Status