Being an urban resident, I tend to walk wherever I go. Sometimes I’ll take the bus but more times than not, even in this often rainy and windy city, I end up hoofing it. I enjoy the exercise I get from walking around the city and it’s a welcome change from my sedentary daily routine spent in front of the computer. However, my walking habit requires the right footware. I need sensible shoes that aren’t stilettos or sling backs but I don’t want to wear my running shoes all over town, after all I’m not Steve Jobs (watch the video below). So what should I wear? A few years ago I finally found the perfect shoe created by Simple Shoes. It was a comfortable, low-profile sneaker at a great price point that didn’t look like a running shoe but also wasn’t a Converse sneaker that made me look like a 14 year old. I became a Simple Shoes addict and would buy two pairs at a time just because I loved them so much. My pedestrian life was perfect and then, Simple Shoes shut down. Whaaat!?
Now, having been a founder of a company that closed, I understand that not all ventures work out. For reasons both beyond our control and within our control, some companies just aren’t meant to be and making the decision to pursue other options is a very trying and difficult thing to do. But letting go of something can be a wonderful feeling and can lead you to greater and more enjoyable ventures. My problem with Simple Shoes wasn’t that they closed, it was the manner in which they did it.
As a Simple Shoes customer, I never received an email notifying me that the company was closing – and yes, I had an online account with them and was subscribed to all their emails. My first suspicion that something was up was when Nordstrom stopped carrying the line. A quick search on Zappos yielded too few results for such a wide spread brand and then I finally figured it out when I saw the Simple Shoes closure explanation on their website. Is this really how your customers should find out that you’re closing? Definitely, definitively, no.
If you ever come to the unfortunate step of closing your business, I have three simple words for you: tell your customers. Whether your user base is small or large, made up of consumers or businesses, you need to be proactive and let them know what’s going on. After all, when you’re running your business you keep your customers up to date with all the latest news about your company, product releases, new hires, etc. You do this because customers like to hear it – maybe not all of it, but for the most part, people like to know what’s going on with a company that’s taking their money. Plain and simple. So why wouldn’t they want to know you’re shutting down?
Although I can’t guess as to why Simple Shoes didn’t send out an email (or maybe my Gmail marked it as spam and if so, I apologize for my mistake), I can analyze the value they lost from this lack of communication. For one thing, they lost money. As a Simple Shoes lover, had I known they were going out of business, I would’ve shopped ‘til I dropped to stock up on shoes. And I’m not just saying this to be dramatic, I mean it. I loved those shoes and had I known they were going out of business, I would’ve committed a majority of my credit card limit to create my own Armaggedon stockpile. So yes, at least from me, Simple Shoes missed out on a hefty purchase by not contacting me.
Second, they lost my trust. About a month after I found out Simple Shoes had closed, I received an email from them… no, it wasn’t a belated closure announcement but rather a recommendation for a similar shoe brand (Simple Shoes was run by Deckers Outdoor Corp. who owns several outdoor shoe companies such as Teva and UGG Australia). For me this “helpful” email was too little too late. The mere fact that Simple Shoes didn’t tell me about their closure made my trust in their brand plummet exponentially. I can’t tell you specifically why this happened – maybe it was because I felt cheated, disappointed, and possibly mislead – but it did. So when I got the recommendation from them, instead of thinking “oh, I trust Simple so I’ll try this new brand” I just looked at the email in disgust and trashed it without even checking out the other brand. Moving forward, I believe that if Simple Shoes utilizes their old customer base again to promote another brand or their new company, I’ll have no interest and ask to be removed from the list.
When we closed ChapterBoard, we informed our users of our pending closure four months before our end date (the day we flipped the switch and turned off the service). Was this enough time? To be honest, I’m not really sure but, looking back, it seemed to be sufficient for most of our users. We gave our users enough time to (1) let the reality of our closure sink in and (2) download their data and figure out what other service(s) they needed to set up. We helped our users through this process, gave them recommendations, and also commiserated with them but only for a few minutes. Unlike Simple Shoes, we were a SaaS company so we couldn’t take advantage of a “closeout” sale to bring in extra revenue but I would’ve done this had the company sold a physical product.
So what can we learn from Simple Shoes? Communication is key, no matter what the status of your company. I read so much about the importance of communicating with your customers to build and maintain a customer base and, in my opinion, it’s all very on point. But it also applies to the closure of your company. People want to know what’s going on, whether you’re rolling out new product or discontinuing a line. If you have a great product, people will give you their trust willingly and, unbelievably, far too easily. It’s your job as the service/product provider, to maintain that trust. And this means telling the customer what’s going on.
I honestly hope you never have to go through the experience of closing your company because it’s really not a fun decision to make. However, if you do, I strongly encourage you to go out with dignity and respect by not hiding the fact that you’re closing. Yes, your customers will be disappointed and yes, you’ll feel embarrassed by your failure (you might even second guess your decision). It is a lesson in humility, no doubt about it. But if you’re honest and upfront with your customers in a timely manner, I promise you it will make your closure that much easier. You’ll actually have an outpouring of love and support from your users, with emails of “please don’t go, we love your service” and “NoOooOOo! What will I do now?”, and this will make you feel better even though you feel sad. Communicating your closure with your customers will also uphold their trust in you, the founder(s). You’ll be able to help them transition to another service or recommend similar products to try out, all of which will solidify the customers’ trust in your abilities and commitment to their happiness. And then, who knows, your exceptional service could motivate your old customers to become the power customers of your new company.