Frederick Reichheld of Bain & Company reports that …
- Over a 5 year period businesses my lose as many as 1/2 of their customers over a 5 year period.
- Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer.
- Businesses who boosted customer retention rates by as little as 5% saw increases in their profits ranging from 5% to a whopping 95%.
So why is retaining customers so often given such short shrift (and resources) compared to obtaining new ones?
Do we take existing customers for granted?
Are we unsure of the level of their satisfaction with our products or services and we’re therefore uncomfortable in approaching them to buy more?
Are our sales’ compensation programs more heavily weighted to acquiring new business?
Has there been turnover in our sales staff and we have accounts who no longer have an account manager or salesperson assigned or, if one has been assigned, who has no relationship developed with that account?
Whatever the reasons it’s obvious that attention to a customer retention program will pay dividends in diamonds to those wise enough to make the investment. My dad would call it, “working smarter not harder.”
