Companies spend a great deal of time and money to attract new customers but many businesses don’t invest nearly enough time in figuring out why they lose customers. In reality, the cost of losing customers is high, in ways you might not have thought about before. Consider these implications:
Added costs. There are added costs in recruiting and adding new customers to make up for the customers that have been lost.
Reputation issues. In today’s world, people have a variety of ways to share their dissatisfaction … instantly. Research shows that customers are much more likely to share bad customer service experiences far and wide than good ones. Bad reviews/public criticism can make it difficult for a company to recruit new customers and even employees.
Lost revenue. When a customer leaves, companies lose not only ongoing revenue but any amount that customer refuses to pay before they depart. That either results in a write-off or added legal/collection costs.
That’s why a customer retention plan is so important. A key part of the plan should include measurement of ongoing customer satisfaction and outreach to customers to see how the company can serve them better. Every aspect of the customer experience should be examined, including the customer service support team. Long hold times, cranky or indifferent employees and unresolved problems can create a serious retention issue for any company. In terms of dissatisfied customers, a plan should be in place to quickly remedy the situation and make every effort to retain the customer.
Lastly, gaining insights from customers who have left the company is extremely important. Asking customers who leave your company why they left is a key way to identify issues. Over time, such information can help you identify problems in your organization that can be fixed to create a better customer experience.