Consider this quote by Fred Reichheld on Customer Experience,
Print it, frame it, and stick it on your wall.
Everybody knows that happy and satisfied customers are a pre-requisite for business success. Google it and you’ll find numerous statistics on how retaining an old customer is more profitable than acquiring a new one.
We’ve listed some of them here for you-
- It cost 5 times more to acquire a new customer than keep an existing one. (SOURCE- Invespcro)
- Probability of selling to an existing customer is 60-70% whereas it is only 5-20% to a new customer. (SOURCE- Invespcro)
- 80% CEOs believe that they deliver great Customer Experience. Only 8% of their customers agreed. (SOURCE- Bain)
- 81% companies now mostly compete on the basis on Customer Experience. (SOURCE- Gartner)
STOP YOUR CUSTOMERS FROM RUNNING AWAY
Here’s the deal.
The Internet and social media have given consumers more power than ever before. The world is smaller. The market is saturated with choices. As a result,
Earlier, if your customers were unhappy, they would leave. Now, to add insult to injury, your unhappy customers leave you for your competition. If this isn’t enough, they are probably bad-mouthing you in some corner of the Internet.
(As per HBR, 48% of customers who had a negative experience told 10 or more others.)
This doesn’t just deter new customers from transacting with you, it also lays waste to all the money you have spent on brand promotion and advertising.
CUSTOMER EXPERIENCE IS THE NEW BRAND
Every time we interact with a company, it leaves an impression.
These interactions could be as simple as browsing a website, placing an order or a little elaborate like chatting with a support agent or visiting their store. All these encounters affect how we perceive the company. What’s more, they rouse Emotion (positive or negative) in us. So, throughout our customer journey, we are exposed to many touchpoints.
And, Customer experience (not to be confused with customer support) is the sum of all customer interactions across a company’s touchpoints.
Here’s an article by Harvard Business Review in case you’re wondering how customer experience is different than customer support.
BETTER CUSTOMER EXPERIENCE FOR HIGHER CUSTOMER RETENTION
Customer retention describes a company’s ability to retain existing customers over time. Unlike lead generation/ customer acquisition, it only focuses on customer who have already purchased or signed up for your product/service.
Satisfying and delighting your customers can help in building a long-term relationship with them. Also, it’s the most effective way to build Brand Loyalty, the end-goal of all CX practices.
There are numerous benefits of improving Customer Experience for Customer Retention.
- There are numerous studies that show that retaining customers is easier and cheaper than acquiring new ones.
- Loyal customers usually make repeat purchases which means more Profits.
- Happy, loyal customers are more likely to spread positive word-of-mouth by telling others about your brand and your excellent product or service. We cannot state how crucial this is for business success. But, remember that 92% of people trust recommendations from friends and family over any other type of advertising.
- When asked, they will take time out to provide you with valuable feedback and insights. You can use this feedback to improve your product without having to spend a fortune on market research.
Customer Retention is crucial for prolonged Growth. Focusing singularly on Customer Acquisition without ensuring that your existing customers are satisfied is not only a waste of resources but unsustainable, as well.
Your existing customers are an important resource for your business. And, improving customer experience can not only help you retain them but delight and turn them into loyal brand advocates.