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In his groundbreaking research, management consultant and author, Fredrick Reichheld, discovered just how customers react to their
suppliers today. Reichheld’s research is summarized in the book Beyond Customer Satisfaction to Customer Loyalty and points out the following dramatic economic impact, both negative and positive, that customers have on the financial success of the firm:
• 15 to 40 percent of customers who say they are “satisfied” defect from a company each year
suppliers today. Reichheld’s research is summarized in the book Beyond Customer Satisfaction to Customer Loyalty and points out the following dramatic economic impact, both negative and positive, that customers have on the financial success of the firm:
• 15 to 40 percent of customers who say they are “satisfied” defect from a company each year
• It costs five to seven times more to find newcustomers than to retain current customers.
• 98 percent of dissatisfied customers never complain – they just switch to other competitors.
On the up side:
• “Totally satisfied” customers are six times more likely to repurchase a company’s products over a span of one to two years
than merely satisfied customers.
• A 5 percent reduction in customer defection can result in profit increases from 30 to 85 percent.
• If companies increase their customer retention by 2 percent, it is the equivalent of cutting their operating expenses by 10
percent (Bhote, 1996).
Based on Reichheld’s research across a variety of industries, businesses should be pinpointing that which satisfies its customers – on an
individual basis. But this level of satisfaction is difficult given the individual values and needs of each person with whom a company has an
interaction. I believe, however, that there are a few key areas that a business can focus on in order to more effectively manage its
customer relationships for the overall success of the business – and for the total satisfaction of the customer.
• 98 percent of dissatisfied customers never complain – they just switch to other competitors.
On the up side:
• “Totally satisfied” customers are six times more likely to repurchase a company’s products over a span of one to two years
than merely satisfied customers.
• A 5 percent reduction in customer defection can result in profit increases from 30 to 85 percent.
• If companies increase their customer retention by 2 percent, it is the equivalent of cutting their operating expenses by 10
percent (Bhote, 1996).
Based on Reichheld’s research across a variety of industries, businesses should be pinpointing that which satisfies its customers – on an
individual basis. But this level of satisfaction is difficult given the individual values and needs of each person with whom a company has an
interaction. I believe, however, that there are a few key areas that a business can focus on in order to more effectively manage its
customer relationships for the overall success of the business – and for the total satisfaction of the customer.
When a customer buys a good or service,many factors certainly influence that purchasing decision. The bottom line is, however, a
customer buys a product or service when his or her expectations have been met, or exceeded, in terms of the offering and the personalized attention of a firm’s employees.
Businesses that do not meet customer expectations on a consistent basis do not survive in the long run, especially in this day and age of competition and advertising clutter.
Create a Branded Differentiation for your Customer Experience to create a memorable and differentiated brand that will turn customers into advocates.
For more information on my Branded Customer Experience Programs please have a look at www.brandone.us or contact me at jerome@brandone.us
2 comments:
Genial brief and this post helped me alot in my college assignement. Gratefulness you on your information.
Sure glad to help. Good luck!
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