1. They are trying to understand every word
Despite the fact that we can cope with missing whole chunks of speech having a conversation on a noisy street in our own language, many people don't seem to be able to transfer that skill easily to a second language. One method of tackling this is to show them how to identify the important words that they need to listen out for. In English this is shown in an easy-to-spot way by which words in the sentence are stressed (spoken louder and longer). Another is to give them one very easy task that you know they can do even if they don't get 90% of what is being said to build up their confidence, such as identifying the name of a famous person or spotting something that is mentioned many times.