Tuesday, October 9, 2012
All companies love the idea of keeping their customers loyal. They survey to assess
satisfaction, create slogans to inspire and make promises to attract customers. However
many have efforts and strategies underway that are roadblocks to loyalty. These
roadblocks could be more easily removed if you put a monetary figure on loyalty.
Increased revenue gets attention and can get “buy-in” from across the organization. Few
are willing to do the hard work to make it happen.
In a recent Dow Jones Report, General Motors Co. stated that for each percentage point
of improvement in customer retention rates, $700 million will be gained in additional
revenue. The auto industry typically retains about 52% of its customers when time to
purchase a new vehicle. GM’s retention rate is right on target with the average. Think
what being above average could do for your bottom line.
Here are some thoughts to consider –
Do you know how much your customer is worth on an annual basis?
How much would be added to the revenue if you kept 1% more of your
If you know the answers to the last two questions, does everyone in the
organization have them committed to memory?
What strategies, processes and attitudes deter the customer from being a retained
It may be hard to calculate the numbers but the work is worth it. Numbers sell others on
seriously moving forward with customer focused efforts. As stated earlier, few do what it
takes to deepen customer loyalty.
Do a quick assessment from your own experience as a customer – when have you
received a “thank you” or show of appreciation from your insurance agent, payroll
provider, mobile phone company and many others. My guess is the answer is not enough
and not often.
Go run the numbers and share the value of a retained customer. Get moving on strategies
to make it easy for customers to remain loyal. Loyalty is fragile and fleeting. Don’t give
them a reason to leave you.