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Causes of Short-term Clients and How They Affect On Companies

Xuan Khanh N Tu

Department of English, Texas Christian University

ENGL 10803: Writing Composition: Writing as Inquiry

Dr. Stacey Said

October 12, 2021

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Causes of Short-term Clients and How They Affect On Companies

The business industry works based on the demand and supply model. Customers are

the foundation of business growth and success. However, one of the common problems the

business field faces is the increase of short-term customers. “Short-term clients are

individuals who only use the items or services for a limited time, which is not ideal for

business.” (R. Leone, October 7, 2021) Business needs long-term customers to grow, build

reputation, gain higher profits, and attract more consumers. Losing this consumer force can

negatively affect the companies. Poor marketing and customer service are some of the main

reasons for failing consumer expectations. Understanding the causes and consequences of this

phenomenon will help companies grow and reinforce the supply-demand relationship. Thus,

the purpose of this essay aims to analyze how insufficient marketing plans and poor customer

service can lead to short-term clients and how this problem impacts companies.

The Causes of Short-term Consumers

Client retention is the ground for business success. According to Chesnokova et al.

(2014), retaining customers ensures the organization’s product sales and profits stability, as it

is less costly to maintain customer relationships rather than establish connections with new

clients. Therefore, continuing enhancing relationships with customers should always be put in

high regard. When a problem arises, this relationship needs to be reviewed promptly. With an

issue of short-term consumers, poor marketing and customer service are most likely some of

the causes.

Mistakes From Marketing Team

First of all, marketing is the key to brand awareness in the industry. There are many

ways to define marketing, but it is generally understood as “the means by which an

organization communicates to, connects with, and engages its target audience to convey the

value of and ultimately sell its products and services” (Adesoji, 2017). Thus, marketing
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insufficiency that fails to attract consumers will prevent them from purchasing products and

becoming long-term customers. As a result, people would only utilize the business goods for

a short time then leave for other competitive brands.

Another huge mistake to unsuccessful marketing is ineffective communication with

consumers, which is potentially one of the direct causes of short-term clients. According to

Waggott (2019), “communication is a key component to any successful business or

organization” (p. 2). Communication with customers helps both sides understand each other’s

expectations. However, a lot of times, communicating with customers seems like a one-sided

information flow. For instance, the sales team would ask questions and feedback about their

products without really listening to what the buyers said, resulting in an interrogating

situation rather than having a conversation (Waggott, 2019). Communication is one of the

businessman’s essential soft skills, so more personal working experience and training should

be implemented. It’s vital to look at the company from the customer’s perspective (Waggott,

2019). Thus, being attentive to customer feedback and adjusting marketing strategy

accordingly will improve the short-term customer issue.

Poor Customer Service

Aside from marketing insufficiency, poor customer service is another leading cause of

short-term clients. Dr. Lance Bettencourt (personal communication, October 8, 2021), a

Marketing professor at Texas Christian University, claimed that despite a variety of reasons

why a customer might leave that was not related to the company (e.g., a customer moves), a

key factor connected to the company is customer satisfaction. The more satisfied customers

are, the more loyal they are to the products (Winata et al., 2016, p. 338). Therefore, customer

dissatisfaction results in the ceasing of business utilization (L. Bettencourt, personal

communication, October 8, 2021). According to Nam Phuong Le (personal communication,

October 6, 2021), a founder of Vandy English Language Academy (VELA) in Vietnam, two
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reasons for customer displeasure are inadequate support for new clients and staff’s poor

interpersonal behavior when interacting with consumers.

Poor client support can disappoint the buyers’ demands and expectations. Consumer

retention is highly determined by how customer service handles complaints. In a study

between March and July 2014 examining the problems of logistics customer service, 86% of

the respondents identified that complaint handling was a vital element of service (Kulyk et

al., 2017). Furthermore, “54-70% [customers who make the complaints] will make a new

transaction if the reason for their complaint is eliminated, and in the case of immediate

reaction to a complaint the percentage of people may rise up to 95%” (Kulyk et al., 2017, p.

217). That being said, “the processing of complaints crucially influences decisions about

future transactions” (Kulyk et al., 2017, p. 217). Quick and adequate customer support during

this stage helps facilitate communication and building trust with clients. For instance, a newly

launched game could be difficult to navigate at first, but with sufficient instructions and

guidelines from customer service, new users would most likely stay and challenge the game.

In contrast, non-detailed instructions and poor response will elevate consumers’ frustration

and lead to their departure. Thus, lacking support for new encounter clients can negatively

affect their satisfaction and length of business utilization.

Moreover, ignoring client feedback will interrupt communication and fade the

relationship bond between customers and the business companies. Customer service does not

solely rely on complaints, but it starts before clients utilize the service until the company

terminates. Coming back to the study above, it is said that “95% of dissatisfied customers do

not actually report complaints, but the vast majority of them stops to buy the products of the

company” (Kulyk et al., 2017, p. 217). As follows, it’s important for companies to

permanently monitor client satisfaction and adjust product manufacturing accordingly (Kulyk

et al., 2017). For example, customer care representatives should maintain the relationship
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with clients and continue to ask for feedback at regular intervals to meet client demands and

preferences. Communication between customers and the business is crucial to improve the

short-term consumer issue.

Unprofessional attitudes when dealing with consumers can also aggravate their

dissatisfaction. Customer service is based on human-to-human interaction. And humans often

mirror others’ emotions. Consequently, when handling frustrated users, service staff could

intentionally or unintentionally become more distressed and reciprocate the negative towards

the customer. This situation would further accelerate the frustration and anger between the

worker and the buyer, leading to an unfavorable communication situation. Being unaware of

this mirrored emotion contributes to business dissatisfaction and the issue of short-term users.

After the analysis with clear examples and supporting evidence above, root causes

come from company operation and personal sides. The root causes of the company's

operation are a lack of preparation in marketing strategy and a lack of training in the

internship process. On the employee side, the root causes include a lack of personal skills and

experience earned during previous education.

Effects of Short-term Clients On Businesses

Short-term clients undeniably have negative impacts on businesses and companies.

The first apparent consequence is that short-term buyers result in negative word-of-mouth,

threatening relationships with potential future customers. Specifically, clients who exhibit

“any of the three emotions of anger, frustration or irritation are likely to spread negative

word-of-mouth to some extent” (Harrison-Waker, 2012, p. 118). This action will spread bad

reputation about the companies. In the new age of social media blooming, news passes on the

fastest as ever, so these potential consumers may not consider the company after reading or

hearing about their close ones’ negative experiences. As a result, this business will

experience a significant loss of potential clients.

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The second consequence is the expensive loss of profit companies have to endure

from short-term clients. In particular, companies have to pay high fees to maintain the

services from those customers who will leave after a short trial time. Director Le (personal

communication, October 6, 2021) shared his experience with short-term clients that the

revenue earned by customers in one or two months cannot pay the cost of recruiting and

onboarding new clients. On the other hand, losing consumers who leave for other competitive

brands from poor customer experience can result in immense loss of profit. As shown in

Appendix, it’s estimated that “the overall impact of bad customer experiences in the United

States is more than $537 billion” (Sickler, 2018, para. 1). Among those clients, four-fifths

stated companies could have prevented the bad experience (Sickler, 2018). Thus, business

staff need to recognize this future loss and start improving their marketing plan and customer

service.

In conclusion, there is a strong causal sequence from underdeveloped marketing plans

and substandard customer service to the increase of short-term users. Particularly, inflexible

marketing strategy and ineffective communication regarding feedback failed to engage the

consumers and meet their demands. While poor customer service, including inadequate client

support, disregarding buyer feedback, and staff's unprofessional attitudes, can deeply break

the trust between the companies and clients. All these causes will result in loss of customers

and profit in the long run. Understanding the causes and effects of this phenomenon will

assist businesses in expanding and reinforcing the supply-demand connection.

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References

Adesoji, F. (2017). Re-defining marketing in the light of recent contributions and

developments in its subject matter. SSRN Electronic Journal, 9(31), 1-13.

http://dx.doi.org/10.2139/ssrn.2998472

Chesnokova, A. V., Radina, O. I., & Serdyuk, R. I. (2014). Consumer loyalty as a factor of

establishing the competitive advantages in a company under the market conditions.

Asian Social Science, 10(23), 255-260. http://dx.doi.org/10.5539/ass.v10n23p255

Harrison-Walker, L. (2012). The role of cause and affect in service failure. The Journal of

Services Marketing, 26(2). 115-123. http://dx.doi.org/10.1108/08876041211215275

Kulyk, P., Michalowska, M., & Kotylak, S. (2017). Assessment of customer satisfaction with

logistics service in the light of the results of the research. Management, 21(1),

205-222. http://dx.doi.org/10.1515/manment-2015-0089

Sickler, J. (2018, July 24). What’s the real cost of a bad customer experience. Text Request.

https://www.textrequest.com/blog/cost-bad-customer-experience/

Waggott, P. (2019, July 2). Rethinking sales and marketing strategies: Reimagining Scotland:

Selling. Scottish Business Insider. https://go.exlibris.link/CK47X7YW

Winata, L., Mia, L, & Langmann, C. (2016). Strategic alliance, information and

communication technology, and customer-related performance: The role of industry

characteristics. Contemporary Management Research, 12(3), 337-362.

https://doi.org/10.7903/cmr.14385
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Appendix

Note. The math behind unhappy customers. From Text Request, by J. Sickler, 2018

(https://www.textrequest.com/blog/cost-bad-customer-experience/). Copyright n.d. by Vision

Critical