Posted: June 2, 2017 by Robert Craven
From The Sunday Times:
“According to a recent Harvard Business Review study, US companies lose half of their customers every five years, with two-thirds of them citing inadequate customer care as their primary reason for leaving. The study calculated that it is six or seven times more expensive to gain a new customer than retain an existing one, and that if customer loyalty is increased by just five per cent, profits can increase by 25 per cent. “
I often quote the figures from Leboeuf that up to 65% of clients leave you because they feel that you just don’t care – you don’t make enough effort.
And as the Americans say, ” Do the math!”.
How much does it cost for you to acquire one new customer?
How long do they stay with you? What is the average gross profit/contribution over the life-time of a customer?
Or put it another way… with, say 1000 clients this year, you will need to replace 200 of them every year just from natural wastage… and yet it costs six or seven times more to sell to new customers… so why not focus on existing customers.
Calculate how much time/money you spend: