The High Worth of Customer Loyalty
Businesses today have a unique challenge to contend with – a fickle customer spoilt for choice. To add to that, a multitude of channels to choose from, and an even larger number of people trying to make them offers they cannot refuse.
In this world, there is no greater truth or advantage than customer loyalty. It’s true for all organizations, big or small – the first purchase is either the beginning of an enduring relationship or the end of the road with the customer. Although, identifying, targeting and acquiring new customers is undoubtedly the most important part of any business, retaining them is equally important, if not more, given the high cost of acquiring new customers and losing existing ones. Consider this example, which highlights the importance of retaining customers: Imagine two businesses, one that retains 90 percent of its customers, the other retaining 80 percent. If both add new customers at the rate of 20 percent per year, the first will have a 10 percent net growth in customers per year, while the other will have none. Over seven years, the first firm will virtually double, while the second will have no real growth. Everything else being equal, that 10-percent advantage in customer retention will result in a doubling of customers every seven years without doing anything else. Consider these eye opening findings on Customer Retention:
Earn loyalty with quality support
Clearly, low customer loyalty costs dearly and in more than one way. And whether a customer stays or leaves is found to depend mainly on the quality of customer service, especially for product-driven businesses. According to a Research, “Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. The prevailing reason for switching was poor quality of service.” Customer experience, therefore, plays a big part in deciding whether the customer becomes your or your competitor’s loyal, long-term source of revenue.
