How to know in B2B sales when a client will switch suppliers

Philippe Pavillet

Feb 22, 2023

According to data gathered by CustomerGauge, the average annual churn rate ranges from 11% in the energy & utilities industry to 56% in the wholesale sector. As a reminder,  the “customer churn rate” is a metric that measures the percentage of customers who stop doing business with a company over a certain period of time. Unfortunately, every industry deals with customer churn and thus everyone should keep an eye on how other companies do to retain and keep their customers. But, why does a customer leave or switch suppliers? 

As we have seen in our previous article, there are many reasons why a client may decide to switch from one provider to another. Here are some of the most common reasons:

  • Better price or value: every business wants the best deal. Thus, clients may be inclined to switch when they feel that they can get the same or better quality of service at a lower price. 

  • Poor customer service: if the level of customer service is lower than expected, or if a customer is experiencing delays, errors, etc., they may consider switching to a provider that can better meet their needs. Indeed, 33% of customers will consider switching companies after just one instance of poor customer service. 

  • Lack of expertise: it may happen that a customer’s needs have changed and their current provider does not have the necessary expertise to meet those demands. In this case, a customer might consider switching to a more specialized company. 

  • Business changes: when a business suffers from changes such as restructuring or acquisition, it may need to change its provider to have one that better suits its current needs. 

  • Better technology or innovation: with the speed at which technology is revolutionizing, there may be companies that cannot keep pace, which is why a customer may have to switch to a more cutting-edge provider. 

  • Personal relationships: this goes beyond customer service, in fact, it is related to personal preferences that sometimes influence a decision to choose one provider over another (e.g. a desire to work with a specific salesperson, a personal connection with a team member, etc.). 

Understanding why clients switch can help you identify potential areas for improvement in your own services and take steps to retain your clients and grow your business. However, in the world of B2B sales, it can be difficult to know when a client is considering switching to a different provider. In this article, we’ll discuss how to recognize this issue and we’ll provide key elements to help you keep your customers on board. 

To start with, you must know there are several key indicators that can help you identify when a client is getting ready to jump ship. By paying attention to these signals and taking action, you can increase your chances of retaining your valuable clients and growing your business. Here are 5 common signals to watch out for:

  1. Decreased communication: If you notice that a client has become less responsive or is taking longer to reply to your emails or calls, it could be a sign that they are no longer as interested in your services as they once were. This could also be revealed when they no longer care about discounts or special offers you are making to them. 
  2. Reduced spending: If a client is starting to reduce their spending on your products or services, it could be a sign that they are considering a switch. This could manifest as smaller orders, a decrease in the variety of ordered products SKUs, delayed or missed payments, or a decline in the frequency of their orders.
  3. Delays in re-ordering: delays in re-ordering can be as well a warning sign that a customer is considering switching to a different supplier. 
  4. Complaints or feedback: When a customer is providing more negative feedback or complaints than usual, it could be a sign that they are no longer satisfied with your services and are looking for alternatives.
  5. Comparisons with competitors: If they regularly compare you with a competitor, ask you questions about alternative solutions, or constantly refer to contract terms it could be a sign that they are considering a switch and are exploring their options. 

Therefore, what are the elements that can help you keep your customers for longer? 

Without a doubt, knowing the next order expected date and amount of each of your customers will help you retain them and dissuade them from switching to another provider (learn here how to calculate it). For example, if a client is planning to reduce their order or delay it, it could be a signal that they are dissatisfied or that they are experiencing some issues with their current service so the salesperson should reach out to them. In short, by having this data you will be able to proactively work with your customers to ensure that their needs are being met and that they are receiving the best possible service. 

Additionally, you will be capable of planning and allocating your resources more effectively. For instance, if you know that a large order is coming in, you can make sure that you have enough inventory or staff to handle it, ensuring that the client receives their order on time and is satisfied with your service.

Another crucial element in retaining B2B sales clients is knowing the churn status, which is the likelihood that a customer will stop doing business with you and move to a different provider at any point in time. By keeping track of the churn status of each of your customers, you can identify those who are at risk of leaving and take proactive steps to retain their business. Moreover, it will help you prioritize your sales and retention efforts. By focusing on those who are at the highest risk of churning, you can allocate your resources more effectively and increase your chances of retaining those customers who are most important to your business (Learn more about prioritizing customers here).

AI-based predictive analytics tools can play a huge role in identifying potential customer churn and anticipating future customer behavior in B2B sales. They are tremendously convenient to analyze large data sets and identify patterns or trends that may indicate a customer is at risk of churning. They can also find out which products or services are most likely to appeal to specific customers and target your sales efforts accordingly, all based on historical data, customer interactions, and other relevant information.

By leveraging these technologies to better understand customer behavior and ordering patterns, you will be able to take proactive steps to address any issues and build strong, long-lasting relationships with your clients.

Request a personalized demo of our tool here!

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