Recently a friend of mine told me that he has lost one of his customer for 9 years , for meager small price difference.
All of us whether in business or profession face customer attrition. Yes they leave us. Those who are involved in customer acquisition know how difficult it is to get one. So many meetings , follow up , promises and discounts offers it takes to get a customer.
Therefore when we lose our customer its painful as well as loss making proposition. Retained customer is an income , acquired customer is an expense as it takes 5 to 7 times the money to acquire new customer than to retain a one.
As the customer gets older cost of acquiring him gets written off over the period of time. It is always better and smarter to not only retain a customer but also get referral from him to get a new customer.
A value of customer is = profit out of his repeat purchase + referral leads he offers (which saves 5 to 7 times of cost of acquiring a new customer)
But if customer is so important to any businesses important question to think is why do businesses lose customers to competition ?
- - Better Price
- - Better Speed to Delivery
- - Better Understanding of the customer
- - Better Proximity
- - Better Quality
Most important are Better Relationship (Human aspect of dealing & not CRM) and Better Customer Experience (Emotional Connect).
Sometime you may wonder why ever after focusing on the above 5 tangible aspects , your business is still losing customers ?
It may ( MUST ) be because you are ignoring completely the two intangible but critical aspects of business - customer relationship and customer experience.