‘Closing Down’ Signals

Recently, a lady consumer went to a beauty salon chain store for her regular grooming. She was a loyal customer and had been visiting that brand and location for many years. She was accustomed to making a pre-payment for a period in advance and then using the services subsequently.

This was part of the Loyalty Programme of the salon, wherein customers could use their earned Loyalty Programme points for another 45 days from the expiry date, provided they made a pre-payment for an additional service to be availed of within the next 45 days.

During this visit, the service provider, who had known the customer for years, refused to accept the pre-payment. When the customer asked why, as she had been following this payment pattern for a long time—just like many other customers for convenience and peace of mind—the service provider again refused.

It was surprising to the customer that she was willing to pre-pay and trust the brand, but the service provider of the brand was unwilling to accept the pre-payment.

Obviously, the customer received a clear signal. Something was wrong. Was the beauty salon closing down? Was this location being changed?

Otherwise, why would a brand, where she had been making pre-payments for a long period, suddenly refuse pre-payment and booking?

Consumers can see through situations. If there is a closing-down signal from any brand, it makes consumers angry, upset, and determined to switch to another brand.

Not explaining the reason for refusing pre-payment left the customer puzzled, and she concluded that the beauty salon was closing down.

Naturally, the customer switched to another brand. She went to another salon, pre-paid for a whole year, and received the convenience and loyalty points. For every four services, she received the fifth service free. Now, she is enjoying the services of the new brand.

The ‘closing down’ signal for the brand that lost the business became an ‘opening up’ signal for a competing salon that gained additional business.

In another case, an airline stopped taking pre-bookings. Regular travellers and consumers started questioning why this was happening.

Typically, consumers book in advance for one of two reasons:

• Pre-planning habit
• Better pricing opportunities

Pre-booking airline tickets is a common practice—whether for work, leisure, official travel, or pilgrimages. A sudden change in this policy raised concerns among customers.

When an airline says, “Sorry, we cannot take pre-bookings,” it sends a signal to the consumer or traveller.

• Why was the airline behaving this way?
• Why was the airline refusing business and money, even when the consumer was willing to pay?

Customers started questioning whether this airline was closing down. This was a clear closing-down signal!

Recently, with the merger of a couple of airlines from the same group, transparent announcements and advance information helped solve the problem and avoided creating closing-down signals for consumers.

Transparency in any marketing move helps avoid giving consumers the wrong signals.

In another amusing yet alarming experience, a store salesperson, who had been serving a customer for years, suddenly asked a peculiar question:

“Can you find me a job elsewhere?”

The customer was shocked. This loyal and trusted service provider, who had been dedicated to the store and its customers, was now desperately looking for a job elsewhere.

He was so desperate that he even asked a customer for help!

Was this a sign that the store was in trouble? Was it a closing-down signal?

What was happening? Was he being terminated?

No, the customer knew that this was a good counter salesperson who had been performing well. There must be some other reason.

Could it be that the store was closing down?

Once again, the customer perceived a closing-down signal.

When something out of the ordinary happens, it makes the customer question and feel puzzled at the same time.

My brand mantra is:

Obviously, the customer would start looking for another brand to get serviced, because they had just received a loud and clear closing-down signal.

In a busy and successful electronic store that had been keeping all types of gadgets and electronic items for years, loyal customers suddenly started facing an unexpected issue—‘stock-out’ and non-availability of products.

Over the last three visits, customers asking for certain products or brands were met with a disappointing response from the counter salespeople:

• “Sorry, sir, this is not available.”
• “It is out of stock as of now.”
• Other vague excuses

A store is supposed to stock products so that customers can walk in and buy them. If a store fails to do so, it signals a deeper issue.

The customer starts wondering:

• Is the store facing financial problems?
• Is it planning to change its location?
• Is it switching to another business?
• Or is the store shutting down?
• Could the entire chain of this brand be closing down?

After deep thought, the customer concludes that the repeated ‘out of stock’ and ‘not available’ responses signal a possible closing down. This perception is extremely dangerous for the store and the brand associated with it.

• Customers do not want to associate with a brand that seems to be on the verge of shutting down.
• A ‘closing down’ signal leads to customer migration to another brand.
• If the brand is perceived as disappearing, customers will end their relationship with it and move on.

Sometimes, the signal comes in the form of the salesperson’s or manager’s odd behavior. Earlier, the salesperson or manager used to be eager, keen, and enthusiastic while dealing with the customer. Now, over the last couple of visits, all the enthusiasm has drained out, with salespersons and managers displaying disinterest.

• Something is drastically wrong.
• Perhaps, this brand is closing down.
• This is a closing-down signal—time to go elsewhere.

A lack of enthusiasm in service personnel directly impacts customer perception, making them believe that the business is on a downward spiral.

A well-kept, clean restaurant—once full of fresh air, spotless tables, chairs, and cutlery—suddenly starts looking shabby. Its upkeep is down.

• Cobwebs and dust are visible all around.
• The windows are dirty.
• The entire ambiance looks unkempt.

Rather than being fresh, glowing, and inviting, the restaurant now resembles a dilapidated warehouse, creating a depressing atmosphere.

Loyal customers who once walked in to rejuvenate themselves, enjoy the ambiance, and relish the food now feel let down. The decline in image, hygiene, and cleanliness sends a clear signal:

• The restaurant that once lifted customers’ spirits now dampens them.
• Customers no longer feel comfortable bringing friends and relatives.
• The place has deteriorated drastically—is it closing down?

Would a customer bring friends and family to such a place in the future?

No way! It would ruin their reputation as well.

A poorly maintained environment does not just damage customer experience—it pushes customers away permanently.

A closing-down signal spreads bad news instead of creating a positive buzz. Instead of attracting customers, it sends a message:

• “Keep away from me, I am not worth it.”

In brand marketing, professionals are familiar with ‘opening-up signals’, which indicate progress and growth. However, ‘closing-down signals’ create depression, desperation, and regression.

When a brand or its team unintentionally or deliberately sends closing-down signals, it essentially tells customers:

• “Don’t come to us. Go to the competitors.”

This is a disastrous mistake in brand marketing.

If a business intends to shut down, the best approach is:

• Be transparent.
• Make a clear announcement.
• Exit the market cleanly.

Sending closing-down signals slowly damages the brand’s reputation, prevents rejuvenation, and even hinders future business ventures.

A closing-down signal does more than drive away customers. It creates long-term damage:

• It tells the market that even a future business venture might suddenly close down.
• Customers question their loyalty—“Is it worth investing my trust in this brand?”
• Once a brand is perceived as unreliable, it struggles to regain credibility.

Brands that send closing-down signals risk losing everything. Whether it is due to neglect, poor service, or deteriorating upkeep, the message to customers remains the same:

“This brand is no longer worth my time.”

If a brand wants to survive, it must send positive, engaging, and reassuring signals—not those of decline and defeat.