The 80-20 administer which is more usually known as the Pareto guideline has been the administer of thumb in business. As bulk businesses receive 80% of their sales from 20% of their customers, one must correspond that the 2 bulk noteworthy objectives in customer retention is to first foster the customers belonging in the 20% and, second, is to transform the relationship and purchasing frequency and volume of the other 80%.
With such a small fraction of the total customers presently delivering the bulk of the earnings, and losing a single customer from that essential 20% will have a great impact on profit, the diagram of businesses prioritizing customer retention is now promptly growing. And positioning the explored later “customer loyalty” is not basically realised particularly if you examine sighting # 2.
On average, a business experiences a 25% customer attrition rate per year.
Every year, there is a high likelihood that ¼ of your customers will desert you. The seal intents why customers abandon a goods or service are the following:
- No longer paying for the category of your goods / service
- Unhappy with the price of the goods or the quality of service
- Not delighted with the goods / service
- Unhappy with how they are being treated
Measuring the satisfaction of your customers based on these 4 factors is essential in safeguarding a prolonged and profitable relationship between you and your customers. And the importance of taking care of your customers is doubled after you include sighting # 3 in the equation.
It expenditures 6-7 times more to earn a novel customer than to save an existing one.
For every dollar you spend in generating an existing customer delighted, you deficiency to spend $6 more in lead to receive a novel customer. The high difference in the charge of customer acquisition to retention gives more pressure to businesses in enhancing their spending budgets on customer retention programs. This money is worth every penny especially once you take into account assertion sighting # 4.
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