The average value of a lost customer is $243

012a5145a53bd860004974e600f5fa31What 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
  • 63% of marketers felt that new customer acquisition is the most important advertising goal 

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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.

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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 ?

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