Shocking Statistics About Customer Loyalty
Is Customer Retention Really That Important?
(Hint: Yes.) Seven surprising customer retention statistics show us why.
Higher Customer Retention = Increased Profitability
Earl Sasser of Harvard Business School worked with Bain & Company to find that a 5% increase in customer retention can increase a company’s profitability by 75%.
It Costs More to Get New Customers. In multiple studies, McKinsey & Company found that it costs 6 – 7 times more to acquire a new customer than to retain an existing one.
Your Future Depends On It. According to Gartner Group, 80% of future revenue will come from just 20% of existing customers.
What Drives Retention?
Service is the Number One Driver. Customers are 4 times more likely to buy from a competitor if they experience poor service than if they have a problem with products or pricing, according to Bain & Company.
Respond to Customer Questions Quickly. Oracle found that 50% of consumers give a brand only one week to respond to a question before they stop doing business with them.
Poor Service Drives Customers to Competitors. Oracle also found that 89% of consumers began doing business with a competitor following a poor customer experience.
How to Improve Retention
Want to retain more customers? Start by reading these other articles:
- How to Hire the Right Candidates for your Customers
- How to Provide Great Customer Service Training
- How to Choose the Right Customer Relationship Management System
Benefits of Satisfied Customers
American Express found that customers are willing to spend 10% more on average for good customer service.