What in the wild world of sports is going on here ? Companies and agency clients have a greater focus on customer acquisition than retention (44% vs. 16% for companies and 58% vs. 12% for agency clients). KISS Metrics states retaining your customers is low-hanging fruit. Understanding how to create loyal customers so you can retain them is one of the most important things for a business. So why is gaining new customers an issue when servicing existing customers is so important ?
Consumers have lost patience with brands that don’t listen..
- 9.5 minutes are spent on average trying to reach a human when trapped in an automated phone system.
- 61% of consumers take their business to a competitor when they end a business relationship
- 71% of consumers have ended their relationship with a company due to poor customer service
- Globally, the average value of a lost customer is $243
- $83 billion is the cost of poor customer service in the US
- Rookie mistakes on @Twitter can push a customer away
- 65% of Fortune 100 global companies utilize @Twitter to engage with the world
- Companies focus on acquisition more than customer retention, even though it can cost 7x more to acquire new customers
The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% (Marketing Metrics) so why are marketers so focused on new customers ? The answer maybe as simple as numbers. Marketers are so engrossed with spreadsheets and market share that they often overlook the value of existing customers.
Here is a great example. I was in the market for a new Blue-Ray player and started to review models online. Since I have a Yamaha surround sound receiver I first looked at Yamaha products. What I found was that there was a problem with a software update but more importantly several people said that Yamaha’s customer service was really bad and even lifelong customers were moving away from the brand. Needless to say I am not considering another Yamaha product. They have lost customers that probably will never come back to the brand.
71% of consumers have ended their relationship with a company due to poor customer service.
It’s imperative that brand managers and marketers look at their brands as a customer. What is the brand experience for existing customers ?
2 Comments on “The average value of a lost customer is $243”
“$83 billion is the cost of poor customer service in the US”
Just think about how much lost revenue that is! And it’s a problem that is relatively easy problem to solve. Creating a great customer experience every time isn’t impossible, it just means planning ahead, training your team, and learning what your audience really wants.