
The Battle Lines are Drawn
Customers are making their stand, and many companies are not listening. It seems that many companies are stuck in the flat earth syndrome while most customers have moved forward in time to a new reality of a round earth. Customers are silently asking, “Why are Companies focusing on obtaining new customers, and ignoring us?”
Customers are now fighting back in the one way that makes a difference. “On average, companies now lose half their customers in five years” (Frederick F. Reichheld, The Loyalty Effect). But still, companies are stuck in the belief that obtaining new customers is the best way to grow a business.
Sid Ridgley, Customer Satisfaction specialist with Simul Corporation states, “Our Customer Satisfaction and Loyalty Surveys tell us there is good news and bad news about customer loyalty. About 2/3 of every business’s Customers are at risk; that is, they are prepared to listen to another company’s offer and frankly are not loyal. The good news is, about 2/3’s of your competitor’s customers are prepared to listen to your offer.
In Fabled Service by Betsy Sanders, there is an overpowering message that strikes home. In her book, she states the response to the question, “Why Do Companies Lose Customers?” as being: 1% died, 3% moved away, 5% were influenced by friends, 14% were dissatisfied with product, and 68% were turned away by an attitude of indifference on the part of a company.
So what is the bottom line? Instead of fighting the battle of exchanging customers, I recommend you spend a little less on new sales and retain more customers by spending more on the 68% you could potentially lose from indifference. At a fraction of the cost of obtaining new customers, you can show your existing ones that they are appreciated. Customers who feel appreciated spend more.
Do you have a system that promotes customer retention and rejuvenation?
In summary:
About 2/3 of every business’s Customers are at risk
On average, companies now lose half their customers in five years
68% loss of customers because of indifference
Customers who feel appreciated spend more
Customers are making their stand, and many companies are not listening. It seems that many companies are stuck in the flat earth syndrome while most customers have moved forward in time to a new reality of a round earth. Customers are silently asking, “Why are Companies focusing on obtaining new customers, and ignoring us?”
Customers are now fighting back in the one way that makes a difference. “On average, companies now lose half their customers in five years” (Frederick F. Reichheld, The Loyalty Effect). But still, companies are stuck in the belief that obtaining new customers is the best way to grow a business.
Sid Ridgley, Customer Satisfaction specialist with Simul Corporation states, “Our Customer Satisfaction and Loyalty Surveys tell us there is good news and bad news about customer loyalty. About 2/3 of every business’s Customers are at risk; that is, they are prepared to listen to another company’s offer and frankly are not loyal. The good news is, about 2/3’s of your competitor’s customers are prepared to listen to your offer.
In Fabled Service by Betsy Sanders, there is an overpowering message that strikes home. In her book, she states the response to the question, “Why Do Companies Lose Customers?” as being: 1% died, 3% moved away, 5% were influenced by friends, 14% were dissatisfied with product, and 68% were turned away by an attitude of indifference on the part of a company.
So what is the bottom line? Instead of fighting the battle of exchanging customers, I recommend you spend a little less on new sales and retain more customers by spending more on the 68% you could potentially lose from indifference. At a fraction of the cost of obtaining new customers, you can show your existing ones that they are appreciated. Customers who feel appreciated spend more.
Do you have a system that promotes customer retention and rejuvenation?
In summary:
About 2/3 of every business’s Customers are at risk
On average, companies now lose half their customers in five years
68% loss of customers because of indifference
Customers who feel appreciated spend more