Why Customers Stop Buying From You (The Psychology Behind Churn)

0:00So, here's something that took me way too long to figure out. When a customer stops buying from you, most of the time they didn't actually decide to. Like, there was no moment. They didn't sit there waiting you up going, "You know what? I'm done with this brand." Nothing that clean happened. They just kind of drifted. And if you call them up 6 months later and ask them why they stopped buying from you, most of them couldn't even tell you. They would have to make up a reason on the spot. And that's the part that trips e-commerce founders up. Your repeat purchase rates are bad, so you go, "Okay, must be the

0:35product or the price or the offer." And sometimes, sure it is, but most of the time it's none of that. Product was fine, they liked it, they just forgot you existed and nothing pulled them back. Because here's the simple truth, customers don't leave for logical reasons, they leave for psychological ones. And there's a handful of things going on inside your customer's head completely below the surface that quietly pull them away from you. And once you understand what those are, you can build something that works with them

1:09instead of getting steamrolled by them. So, that's what this video is, the real psychology of why people stop buying and exactly what to do about each one. So, let's get into it. Quick bit of context on me first. So, I spent 7 years building the back-end for over 150 e-commerce brands and driven more than $300 in revenue through it with my email and SMS marketing agency Magician. And when you watch that many customer bases behave across that many brands, you stop seeing individual people making individual choices. But you start seeing the same patterns fire over and over and over again. So, the same drift on every

1:48account. And it doesn't really matter what they sell. So, let me walk you through the ones that actually matter. Let's get into the psychological stuff. So, let's start with the biggest one, and it's the least dramatic one, which is exactly why nobody plans for it. So, your customers are forgetting you. And I don't mean that in some kind of poetic way, but I mean they're actually forgetting you. So, there's this piece of research from the 1880s, a guy named Hermann Ebbinghaus, and it's been replicated a bunch of times since, including pretty recently, and he basically mapped how fast humans forget stuff. And it's actually brutal. So,

2:29without anything to reinforce it, people forget about half of new information within just days, and up to 80% of it within a couple of weeks. Now, think about that in terms of your brand. So, someone finds you, great first experience, loves the product, and then you go quiet. Two weeks later, roughly 80% of what made you special has just evaporated out of their head, and not because they're disloyal, just because that's how human memory physically works. So, you're competing against

3:00biology here, and biology is winning. And here's the thing that makes it even worse. So, your customer is getting hammered with hundreds of brands and ads and emails every single day, and every one of those is basically piling on top of that little faint memory of you, burying it. So, unless something actively drags you back up to the surface, your brand is sinking. So, what beats the forgetting curve? Well, the exact thing that Ebbinghaus found beats it, spaced repetition. So, showing up again, and again, and again, intervals, so the memory never fully fades before you top it back up. And when you translate that out of the psychology

3:42speak and into the e-commerce world, that's just consistent email and SMS. Like, this is the actual scientific reason we tell e-commerce brands to send every other day, so three to four times a week. It's not because we're trying to squeeze more sales out of people, but it's just because every single send is a little reinforcement that resets that forgetting curve and stops you thinking under everything else in their head. So, the brand showing up every couple days

4:09is the brand that exists in their heads. The brand emailing once a month is a brand that the customer has neurologically already forgotten about. And picture the difference here, right? So, the brand that emails once a month, they sent this "Here's 20% off everything" blast, and it lands on someone who's already forgotten who they are. So, it just reads like spam from a

4:33stranger, straight to the trash bin. But, the brand that's beating the forgetting curve, they're showing up every couple days with something small, something worth opening. So, a quick tip, a customer story, one useful little thing. So, that by the time they do make an offer, they are a familiar face. And the revenue numbers will increase away more, purely because one of them stayed in memory and the other one didn't. So, if you take nothing else from this bit, customers who went cold on you, most of them they didn't reject you. They just never heard from you enough to remember you. And that one is 100% on you to fix

5:10right now. All right, let's get into reason number two. And this one is sneaky because it happens even to customers who love you. So, there's this thing psychologists call hedonic adaptation, and it basically just means that humans get used to anything. So, the first time you experience something good, it's a spike. Feels amazing. But, the 10th time, it's just normal. It's why the thing you were dying to buy last year is just a thing you own right now. So, the excitement always fades back down to the baseline, every single time. Now, think about what that does to your customer because that first order, first time using your

5:51product, that was a peak. It was a real excitement. But, by the third or fourth time, the product hasn't changed, but the feeling has. It's just part of the routine now. It's wallpaper. And a customer who feels nothing when they think about your brand is a customer who's now just one competitor's shiny new ad away from being gone. And not because you got worse, but just because the feeling flattened out. And somebody else's newest thing feels just more exciting to them than your familiar thing. And this is why the e-comm brands that are always dropping new stuff just retain better. So, new flavors, new drops, new variations. They're not just

6:33doing that for fun, but it's because the newness re-triggers the spike and it fights the adaptation. And of course, don't get me wrong, you can't always out-launch this. So, especially if you got one core product. So, the other move, and this one's pure psychology, is you re-inject the feeling through how you talk to them. So, you remind them why they were excited in the first place. So, you show them a use they hadn't thought of. So, you tell them a story behind the product again. You show them another customer getting a result, which makes them picture their own result all over again. So, you really want to re-ignite that first feeling

7:10that they had from your brand the first time. So, for example, instead of emailing them "Restock your supply", you sent "Three ways customers are using this that you probably haven't tried." And boom, now you've handed them a fresh reason to be excited about a product that they basically stopped noticing. Or a little founder email that goes, "Here's the one thing most people got wrong with this and how to get twice the result." So, you're not discounting anything, you're just re-injecting that spike. Because a customer who gets reminded why they loved you resets a little closer to that peak again. And a customer you just leave alone, they

7:48quietly adapt you into the background and they move on and they go to one of your competitors. So, a quick pause from this video. Everything that I'm getting into here, so how you build this into your flows and your campaigns, I've put all of it into a free email marketing course on my website. It's packed and it's 100% free to download for you. The link is in the description below. So, go grab it after watching this video and let's keep going. Okay, let's go with the third reason and this one is my favorite. Because once it clicks, you

8:19start seeing it literally everywhere. So, there's this famous piece of research from Daniel Kahneman. And this guy won a Nobel Prize and it's called the peak end rule. And what it says is kind of wild. So, when people remember an experience, they don't average out the whole thing. They basically remember two moments. The most intense moment, the peak, and the very end. And that's it. So, everything else just gets compressed and thrown out. And they proved this with a pretty uncomfortable little study. So, they had people stick

8:54their hand in painfully cold water. First version, 60 seconds of cold and then they were done. The second version, the same 60 seconds, but then 30 extra seconds where they made the water slightly, only slightly less freezing. So, objectively that second group is more total discomfort, right? More seconds of pain. But then they asked the people, "Okay, which one would you rather do again?" And most of them picked the longer one, the one with more pain. And why? Because it ended a little better. So, that better ending literally

9:29rewrote their memory of the whole thing. Cool story, right? But okay. So, how does this apply to your e-commerce brand? Well, your customer is not sitting there remembering every email and every touch point and every order. They are remembering their peak moment with you, and they are remembering how the last thing felt. And that's where the problem is, because for most e-commerce brands, what's the last interaction that a customer has? It's a shipping notification, or even worse, it's nothing. Or worse than that, it's a your card is about to be charged notice from their product subscription that reminds them of a cost right at the moment they were about to feel good

10:09about it. So, their last memory of you isn't that positive. So, two things fall out of this. Number one, you've got to engineer a peak on purpose. So, an actual moment of delight somewhere in there. So, a founder message that feels like a real human wrote it. An unexpected free gift or bonus. Something that just spikes, cuz that peak is what they're going to remember. So, you do not leave it chance. And number two, you obsess over the endings. So, the end of your welcome flow, the end of your post-purchase sequence, the last email before they naturally go quiet. Those endings are weighted way more heavily in

10:47memory than anything in the middle. So, that subscription renewal notice, instead of your card will be charged, it becomes your next order is on the way, here's what's coming. It's the same event, but you just move the ending from a cost they feel to a thing they get to receive. And that little reframe is doing real psychological work. It's changing the memory that decides whether they come back or not. And most brands pour everything into the middle and completely fumble the two moments that actually get remembered. So, to recap everything of this section, fix the peak, fix the end. Now, let's get into reason number four. And this one is

11:25about why some customers were basically always going to leave, and how you stop creating those customers in the first place. So, there is this principle from the old famous Robert Cialdini. We all know him, right? It's commitment and consistency. So, humans have this deep need to act consistently with who they think they are and with that they've already done. So, once you take an action, especially a small one out in the open, you're way more likely to keep taking actions that line up with it. And you felt this. So, once you start something, quitting feels wrong. So, you just keep going. Now, here's how this quietly murders your retention. Because

12:05a customer who buys once on a discount and never really engage with your brand at all, that person has made basically zero commitment to you. In their own head, they're not a customer of yours. They're just someone who grabbed a deal one time. So, there's nothing pulling them to stay consistent because there's no identity there to be consistent with. So, that person turns and it doesn't even register to them as leaving. Now, compare that to a customer who somewhere

12:34early on took a couple of tiny actions. So, they answered a question about themselves. They told you their goal. They engaged with a piece of your content. Every one of those little actions is a break in the story of I'm someone who's into this brand. And that story, that's the thing that makes the second and the third purchase feel natural instead of feeling like a brand new decision every single time. So, the move is that you engineer small commitments early on. And this is exactly why we love a sign-up form that asks a question before it asks for the email. So, the customer tells you what

13:10they actually care about. And that's what we call a micro commitment. And it's why the best welcome flows gets a little bit of engagement instead of just blasting offers at people. And it's why asking a customer to tell you their goal and then following up on that specific goal works stupidly well. and picture it

13:28in an actual email that you can send. So, the first message in your welcome flow, it's not just here's your 10% off, go buy, it's we question what are you trying to fix with like two or three buttons that they can tap. So, then they tap one and that tiny tap, that's the first brick of the whole story. And then the next email speaks directly to the answer they gave, which makes them feel

13:52understood, which makes them tap again. So, by the time you ask for the sale, they've taken four little steps towards being your customer. And backing out now would kind of contradict the version of themselves they've been building. So, now compare that to a flow that just yells the discount at them four times and one of them built a customer while the other one just rents one. And the brands with the best retention aren't just selling harder, they're getting the customer to take those little tiny steps that makes leaving feel inconsistent with who they've become. So, that's an important learning from Chalene. Okay, reason number five and this is probably

14:32the single most powerful level in this whole video for dragging a drifting customer back because it's way deeper than almost anything else and it's something called loss aversion. And it's one of the most replicated findings in all of behavioral economics and it says something really simple. So, losing something hurts about twice as much as gaining the same thing feels good. Like you find 20 bucks on the street, nice,

15:02little lift, feels good for a second. But you lose 20 bucks out of your pocket, you are annoyed about that for the rest of the day, right? So, it's the same amount of money but a totally different emotional weight. So, your brain treats the loss as basically double. Now, here's where almost every e-comm brand gets their win-back attempts completely backwards. So, your customer goes quiet, and what does the standard customer win-back email automation say? Hey, we miss you. Here's 50% off. Come back. And that's framed as a gain. So, you're offering them something extra. And gain, like we just

15:42said, is the weaker of the two forces. It's the 20 bucks on the street. So, really easy to just shrug off and ignore, right? So, now let's flip it. Instead of offering a gain, you remind them of a loss. And the cleanest way to do this is a store credit or points. So, instead of here's 50% off, the email goes, you've got $15 in rewards sitting

16:08in your account, and it expires Friday. So, with the first example, you're giving them something. With the second one, they're about to lose something that's already theirs. And psychologically, those are night and day different, even though the dollar amount is identical, for example. Because nobody wants to sit and watch money that belongs to them just evaporate, right? And you can even do this with no discount at all. So, the frame is just to point at what they're already losing by drifting away. So, it could be the progress that they've built, the results they were starting to see, the habit that they were forming that's now slipping away. So, for example,

16:50something like, you were 3 weeks into building a routine. Don't let it go to waste. So, it's a totally different angle again than just the standard we miss you that we see all the time with customer win-back flows. Because you've taken their own effort, thing that they've already invested in, and turn it into something they're about to lose. So, point at the loss and not at the gain. And of course, this is not just something that you can apply to a customer win-back flow, but also with your regular email campaign. Now, let's talk about the last reason. And this is the one that punishes brands for trying

17:25too hard. So, there's this psychological effect called reactance. So, when people feel like their freedom to choose is getting threatened, when they feel pushed or pressured or manipulated, they don't just resist, but they actively push back to grab that control back. So, even against something that they might have actually wanted. The pressure itself becomes the reason to say no. And this is exactly where that aggressive, high-pressure, buy now, last chance, only 2 hours left playbook just backfires for a lot of the e-commerce out there, especially on your good customers. So, every over pushy email, every fake urgency countdown, every third discount this week, it will just

18:07annoy your good customers, even if it's subconscious. So, it reads like manipulation, and the customer's response isn't always to unsubscribe loudly and slam the door, but a lot of the time it's quieter than that. So, they just start ignoring you. They start tuning out. The relationship curdles a little bit each time, and then one day they're just gone. And you never got a single signal that it was happening. And there's a slow version of this with discounting, too. So, when you constantly slam people with discounts, you are training them, sure, but you're also kind of subtly insulting them, because you're basically implying that the only possible reason that they would

18:53buy is with a deal. So, your customers who actually value the product start to feel like they're just being handled, and the whole relationship just starts to feel cheap to them and transactional. So, the countermove is you lead with value way more than you lead with pressure. So, most of your emails should give something. It should teach something. It should tell a story, hand over something useful before they ever ask for anything back. And keep your urgency real because real deadlines are totally fine, but it's the fake ones that poison the well. And you want to cap the amount of discounting. So, not just for your margins, of course, but

19:35because every unnecessary discount is a tiny little message that says, "Hey, we don't think our product is good enough on its own." So, give people the room to choose you, and way more of them will actually will. So, order them, and their brain fights back even when they liked you in the first place. So, step back and look at all the six reasons together for a second because there's a pattern here. So, your customers forget you. The feeling wears off. They only remember the peak and the end. They never build up any commitment, and they react way harder to losing than to gaining. And they push back the second they feel

20:14pushed. So, now notice what every single one of those has in common. Not one of them is a product problem. And not one of them gets fixed by going and buying more customers. So, every single one of them is about the relationship after the initial sale. And every single one of them gets solved in the same place. It's the channel where you can show up consistently to beat the forgetting curve, to re-inject the feeling, to engineer the peak and the end, to build up those small commitments, to frame things around loss instead of gain, and to lead with value instead of pressure. And those channels, those are email and SMS. And not because

20:57it's some magic tactic, but because it's the only place that you can actually run all six of these plays on the right customer at the right time for pennies because these owned channels are where the psychology of retention gets executed. Everywhere else, you're just kind of hoping, let's be honest. And now, of course, understanding these six reasons is just one thing, but actually building a system that runs all of them on autopilot, timed to how your specific customers behave while you're busy running the entire business, that's a completely different thing. And that's the gap that most brands just never close. So, if you'd rather hand it off

21:38to a retention team that does exactly this, that's us. So, we build and run email and SMS for seven, eight, and nine-figure e-commerce brands, and this psychology is baked into how we structure every single automation and every single campaign. So, if you want us to take a look at the where your customers are actually dropping off, you can book a call using the first link in the description below right now. Now, there is a flip side of this that I didn't get into in this video. Because understanding why customers leave,

22:11that's really only half of the equation. The other half is what actually makes them come back and buy again and again and again. So, the specific mechanics the best brands use to turn one order into 10. And that's a totally different set of moves. And I broke the whole thing down in this video right here. So, go watch that one next, and I'll see you

22:34over there.