There has never been a more competitive time or a period when customers have more control over their service experience than in today’s marketplace. If you’re not staying on top of your processes as well as the customer touches of your business, you face losing the profitability race.
Ask yourself three questions:
How’s Your Customer Retention and Loyalty? Did you know it costs 6 to 7 times as much to attract a new customer[i] as it does to stop the defection of an old one? And yet, 40 percent of companies have a greater focus on acquiring new customers; while only 18 percent focus on retention.[ii]
Poor customer service is costing companies in the United States a brain-numbing $84 billion every year! And these unhappy consumers aren’t waiting around. Instead, they began doing business with a competitor following a poor interaction. With 70 percent of customers saying they would have stayed if their issue had been resolved in a single interaction,[iii] this statistic is worth remembering.
As a 2 percent increase in customer retention has the same effect as decreasing costs by 10 percent. Depending on the industry, reducing your customer defection rate by 5 percent can increase your profitability by 25 to 125 percent.[iv] More importantly, customer profitability tends to increase over the life of a retained customer.[v]
Perhaps you believe you’re doing a great job. Don’t assume—confirm how you measure Customer-Centric Service—because what’s scary is while 80 percent of companies believe they provide a “superior customer experience,” only 8 percent of customers agreed.[vi]
Do You Know Your Customer Retention Rates? In a business that sells a product/or service with recurring revenue renewal models, it’s particularly crucial you have a good grasp on how many customers are abandoning your business. Do you know the real reason they’re departing?
With 9 out of 10 consumers saying they would pay more to ensure a good customer service experience,[vii] it is critical you build-in processes that: listen to your customers!
Because as Kristin Smaby asserts: “When customers share their story, they’re not just sharing pain points. They’re actually teaching you how to make your product, service, and business better.”[viii]
Are You Taking Advantage Of the Connection Between Employee Engagement and Customer Retention? Gallup research has found that managers are primarily responsible for their employees’ engagement levels.”[ix] BlessingWhite’s research cites bad managers as the third most common reason for leaving (trailing lack of career growth and dislike of the actual work). [x]
With this in mind, transforming adequate managers into exceptional ones is vital. Such a shift translates powerfully throughout your organization.
Once managers realize how vital customers are to the organization’s profitability and given the tools, it is an “Aha” moment that has them allocating time for their workforce. Employee engagement and retention leading to satisfied customers isn’t a side-bar activity—it’s a primary obligation.
Did you answer any question negatively? How do you intend to tighten-up every interaction, so you always respond with a Customer-Centric Service mindset?
[i] Whitehouse Office of Consumer Affairs
[iv] Article: Customer Retention, Repeat Sales, Referrals– are Business Imperatives: Bridging with Customer Satisfaction, Loyalty, Lifetime, Score…
[ix] Gallup, State of the American Workplace, page 11.
[x] BlessingWhite, The State of Employee Engagement, page 2.