Acquiring new customers is great but forming profitable,
long- term relationships with your existing clients is even better.
We have all heard the saying "It is cheaper to keep a customer
than obtain a new one", but let’s have a better look at
what that really means.
According to research experts, it's costs five to ten
times more to acquire new customers than to keep the ones you already
have. The Harvard Business Review noted that a 2% rise in customer
retention equates to a 10% reduction in operating costs. In addition,
an improvement of 5% in customer retention can result in profit increases
of up to 85%!
Poor after sales customers service can negatively impact
not only repeat business, but new business as well. Statistical research
estimates that the average "wronged" customer
will tell 8 to 16 people about his negative experience.
At the end of the day, to retain customers implies
that you know what they want or at least can meet or exceed their
expectations. Unfortunately the needs and desires of customers include
too many variables to be applied universally. Specific Customer Satisfaction
research tries to measure customer needs and satisfaction down to
industry level, groups level, companies within an industry group and
even at the customer segments level within a company. However even
these types of initiatives are unable to predict if, within a reasonable
degree of statistical accuracy, a customers will remain loyal to a
brand. Customer loyalty questions measure a customer's intention to
be loyal not a customer's actual behaviour. What customers intend
to do may be different than what they actually do.
Investing in tools which allow your company to
track what your customers are actually doing, what they are buying,
what repeat sales and new business are being generated, how your after-sales
service is answering to your customer needs and how your customer
is responding to your promotional and marketing initiatives, places
you in a strong position to improve your customer retention and build
a growing profitable relationship with both new and existing customers.
