This post is part of the 📖 Never Lose a Customer Again series.
Today, I am still reading Customer Defection: A Structural and Cultural Problem chapter from the book Never Lose a Customer Again: Turn Any Sale into Lifelong Loyalty in 100 Days written by Author, Joey Coleman.
Across all industries, somewhere between 20%-70% of newly acquired customers will stop doing business with a company with the first 100 days of being a new customer because they feel neglected in the early stages of customer onboarding.
In Never Lose a Customer Again, Coleman offers a philosophy and methodology for dramatically increasing customer retention and as a result, the bottom line. He identifies eight distinct emotional phases customers go through in the 100 days following a purchase
Yesterday, I started to reading Customer Defection: A Structural and Cultural Problem section from the book Never Lose a Customer Again
THE MANY BENEFITS OF KEEPING YOUR CUSTOMERS
Putting the focus on creating amazing customer experiences for your existing customers is more efficient, more effective, and more profitable than spending that effort on getting new customers.
According to Marketing Metrics, when selling to a new prospect, there is a 5 to 20 per cent chance of making the sale. When selling to an existing customer, that probability skyrockets to 60 to 70 per cent.
Focusing on existing customers makes it easier to sell and grow the business.
The lifetime value of a loyal customer can be greater than ten times the value of their first purchase.
Like money left in the bank account, investments in customer loyalty compound over time. It is six to seven times more expensive to acquire a new customer than it is to keep a current customer.
Keeping a focus on current customers keeps costs low.
When asked about their spending habits, seven out of ten Americans said they were willing to spend more with companies they believe provide excellent customer service and nine out of ten would pay more to ensure a superior customer experience.
If you’re providing a remarkable customer experience, customers will continue doing business with you.
IN THE FUTURE, RETENTION WILL MATTER MOST
In an example offered by Gainsight, two companies with different churn rates have a very similar valuation in year one.
The valuations are dramatically different when the difference in churn rates (5 per cent vs 20 per cent) is extrapolated across a five-year timeline:
The improved retention represents a 280 per cent difference in the company valuation just five years later.
Tomorrow I will read chapter 5 What Is Customer Experience?
- The 2017 edition of the annual CMO Survey (conducted by the Fuqua School of Business at Duke University, Deloitte LLP, and the American Marketing Association) found that the average business spends 6.9 per cent of total company revenue on marketing—and yet less than one fifth of that total spending is dedicated to customer retention activities.
Study after study shows customers across all industries are interested in doing business with the company they already know.
It is six to seven times more expensive to acquire a new customer than it is to keep a current customer so create activities in your company to engage existing customers rather than going after new customers.
Keeping more customers pays off with the compounding effect that occurs as a business continues to mature.
Buy or not buy?
This book Never Lose a Customer Again is an excellent read. Do not hesitate to pick this. Pick the physical book, so you take notes and highlight the bits you want to reference later.
Listen, I don’t care whether you buy the book using one of the links on the page or not but just buy. You will be glad for my recommendation.
Do you know you can listen to this book on Amazon Audible for FREE?
If you are not into reading like me, then you can listen to this book for FREE on Amazon AudibleDon't Read. Just 🎧
Part 5 of 16 in the 📖 Never Lose a Customer Again book series.