How Important Is Customer Retention To Your Company

You may have heard what the business experts and numerous research studies have said: it is far more expensive to acquire new customers than to keep existing ones. How much more expensive, you ask? According to the White House Office of Consumer Affairs, it’s between 6–7 times more. And when you consider the findings of Marketing Metrics, that you have a 60–70% chance of selling to an existing customer, compared to the 5–20% chance you have with a new prospect, it becomes apparent why smart business owners are equally, if not more, concerned about their customer retention strategies than their customer acquisition activities.
Your business’ customer retention score is a critical and effective indicator of its performance and stability. If a large number of your customers are returning to do business with you, it means you are doing something right, and your customers are showing their appreciation for that by their loyalty. But if they disappear after making one purchase, you may want to take a long, hard look at your company’s interactions with your customers.
Chances are, you will find that your customers who stay loyal to your company have received positive customer experiences, and those who leave, the opposite. Creating and delivering outstanding customer experiences is the most proven of ways to earn your customers’ trust and devotion to your brand. Developing and implementing a positive customer experience strategy is the weapon of choice of the best companies to stand out from the competition, because it is the singular, most beneficial and effective strategy available to any business.
Great as they are, solitary instances of excellent customer service are not enough anymore to sustain a business in today’s hyper competitive environment. Delivering a great customer experience is a more holistic strategy that can help you reach your customer retention goals faster than just great customer service delivery.
The key to ensuring your customers’ happiness with your company to the point that the idea of transferring to your competitor is unthinkable is to ensure they only have great customer experiences with you. And the key to growing your business, or having a business to grow in the years to come, is to proactively work on your customer retention strategies.
Poor customer experiences are poison to your business. They have the power to contaminate your potential customers’ view of your business, especially when they are recipients of negative news shared through word of mouth or social media.
Great customer experiences, on the other hand, are memorable moments that your customers will happily and proudly share to the rest of the world. These are those delightful moments when the company gave them more than what they asked for, or what they were expecting. These are those interactions where the company went the extra mile and treated them as royalty. These are the experiences when the emotional decision of staying loyal to the company, or moving to their competitor, are made.
So, how important is customer retention to your company?
It should be the most important thing, because it dictates whether a sale will be made, whether a customer will return or not, whether that customer will say positive things about your company or not, whether your business will flourish, or not.
An honest assessment of the kind of customer experiences you are creating for your customers will reveal how important customer retention is for your company.
Working towards a high customer retention score by planning and implementing a positive customer experience strategy is guaranteed to bring you much closer to the vision of success you have for your business.
