Customer Attrition is not a new problem. However, the dawn of social media has sparked what is being called the “communication revolution,” and it is easier than ever for customers to seek out new companies to do business with and voice their opinion when they’re unhappy. Marketers are more aggressive than ever before and with targeted marketing campaigns dropping into prospects’ inboxes, newsfeeds, mail boxes and even cell phones, people are being flooded with offers from companies begging for their business.
All of the competition for business has proven customer loyalty to be difficult, but not impossible to achieve. Providing quality products and services at reasonable prices is a great start, but customers today are so berated with offers from the competition, great prices and service are not always enough. Customer service no longer just pertains to face to face or in store encounters, customer service encompasses all aspects of a customer’s experience with a company, from the initial touch, through the sale, product performance, ongoing support and replacement. Instating a regular customer retention program goes the extra mile and shows customers their business is valued, while reducing marketing costs, increasing purchase frequency, and improving brand image. Customers are looking to buy from companies that appreciate their business, and go the extra mile to show them that.
Why Are Visitors Leaving?
The little known reason customers defect.
While price is a contributing factor, particularly in our current environment where most customers – consumers or businesses – perceive the majority of products and services to be commoditized, service is the primary factor. Low price isn't nearly as compelling to a customer because consumers and businesses are being flooded with offers promising to produce twice the service at half the cost, but a company providing great service and a genuine interest in the needs of customers is the rarity. A study by RightNow Technologies shows that 73% of customers leave because of poor customer service, while the Rockefeller Corporation shows that 68% of customers leave because they think that corporations do not care about their business (source: “#1 Reason Customers Leave” Ann Barr, Ann Barr Blog). People are creatures of habit- what customers really want is a company they can trust and build a relationship with over years, not just a one-time shop- but they are not willing to give their business away to a company that does not appreciate their time or dollars.
Your customers are your competitors’ prospects.
Today’s customer is more vocal than ever before, and social media provides them with a platform to share every aspect, good and bad, of their shopping and buying experience. So if a customer is unhappy, it is easier than ever for competing businesses to capitalize on the experience and target them with special offers to gain their business. Marketers have planted their most enticing offers in front of their ideal prospects- customers buying the same products from elsewhere but have reason to be dissatisfied. Most customers leave a brand they are currently loyal to because they believe another company is more deserving of their business.
Not all Customers are the Same
Retention Marketing Vs. Prospect Marketing
Most marketing plans are so focused on acquisition that they miss opportunities housed within their own internal customer base. Acquisition marketing tactics tend to be more expensive and less effective than simply refocusing marketing efforts towards customer retention. The probability of selling to an existing customer is 60-70% versus the probability of selling to a new prospect which is 5-20% (Source: Top 5 Customer Retention Marketing Tactics” April Dunford, Rocket Watcher Product Marketing for Start ups).
