When it comes to the topic of customer retention, many people have different views. The two more common thoughts are 1. To focus your efforts and attention on the customers you already have, or, 2. Focus your efforts on gaining new customers. Different companies will follow their own strategies. However, when analysed, which approach is the best? This topic has been discussed extensively, though, never before has it been presented in such an accessible way as Biz3.0 and Kapow Events has laid it out to us in this infographic.
Which is better: Retaining Current Customers or Acquiring New Ones?
According to Cloyd Waldo, author at Biz3.0, 68% of customers leave a company as they believe they are not being taken care of as they should. This is a huge percentage and should therefore be taken seriously by companies of all industries as it proves customer service is vitally important. Also, he claims that acquiring new customers can in fact cost you around 5 times MORE than it would for you to not take on any new customers but to make a fuss over your existing clientele.
Waldo also expresses that if a customer is happy with your services, they generally won’t go around telling people. On average, only 9 people will tell others of how great your company is. On the other hand, 22 people will go out of their way to tell others how poorly they were treated, which in turn, means that you are automatically given a bad reputation which equates to fewer customers in the long-run.
Finally, Waldo highlights that 80% of your future customers will come from just 20% of your existing customers. Treat your customers with kindness and respect and you will most definitely be reaping the rewards for years to come.
So, which do you think is better for business: to retain your current customers or acquire new ones?