Satisfied customers are the old customer service culture. If you believe that a satisfied customer will generate you new business, then think again. For in today’s market a click of the mouse will find you another vendor who can equally satisfy your needs. Customer satisfaction is worthless. Customer loyalty is EVERYTHING!
Credit www.gratisography.com
Research in 2006 provided these chilling statistics:
- Attracting a new customer costs 6 times more than retaining an existing customer
- A dissatisfied customer speaks to 6 to 10 more people than a satisfied customer
- 68% of the customers who leave do so because of bad attitudes from the organization’s policies to the front line employee
- Resolving a complaint immediately will retain 95% of your customers
More recent customer service research revealed these shocking statistics:
- 76% of consumers view customer services as the true test as to their value to the company (Source: 2015 Aspect Consumer Experience)
- 33% of customers said they would rather clean a toilet than talk to someone in customer service (Source: 2015 Aspect Consumer Experience)
- $41 billion lost annually by US companies because of poor customer service (Source: NewVoiceMedia)
- 62% of global customers stopped doing business with a brand because of poor customer service (Source 2015 Global State of Multichannel Customer Service Report)
- Selling to an existing happy customer is up to 14 times higher (probability) than selling to a new customer (Source: Marketing Metrics: The Definitive Guide to Measuring Marketing Performance)
So what does this mean for the average business?
First, you must absolutely know your client costs. Until you can measure what it costs to secure a client, you are completely clueless as to how much money you are forfeiting by not building customer loyalty. For example, the average small business spends over $30,000 annually for a membership in a chamber, in a couple of service organizations, in a professional association and in a formal networking group. This estimated figure includes annual dues, meals, travel time and personal time. By identifying all the clients realized from this investment, the business owner can easily determine an average client acquisition cost.
Second, you must quickly assess your organization’s culture to locate the sources for all the bad attitudes. Using an organizational assessment that is aligned to known criteria such as Baldrige is one strategy that you can employ.
Third, you must include customer loyalty as part of your critical goal categories within your strategic plan. If you do not have a strategic plan, get one. Without engaging in a strategic planning process, you will more than likely end up on your competitor’s plan.
Take action now by building customer loyalty so that you will outlive and outlast your competition.