How much do you (really) value your customers?
Business Speaker:
Dale Howarth
We all know that customers are at the very heart of a business. Yet, according to research conducted by The Henley Centre some 80% of customers do not feel valued - not surprising when you consider that most companies only contact their customers when they want to sell them something.
Today, the means to maintain a meaningful, value added dialogue with customers is easier than ever before, but few take advantage of much of what is on offer. Those that do, reflecting a clear understanding of the value they place on their customers benefit greatly from improved customer loyalty, recommendation, referral, affinity and retention.
Whilst many focus on attracting a steady stream of new opportunity to their businesses, little is often done to maximise that which already exists, to do more with existing opportunities. For many, what they need to be more successful is already there, they just don't recognise it.
On average, a company will lose up to 32% of its customer base each year - the frightening thing is that most don't recognise it. A study conducted by BAIN indicates that across a broad range of industries a 5% improvement in customer retention can see an improvement of up to 125% in profits. So, why do we lose so many customers?
Price, cited by many as the cause of lost business is not all that it is made out to be, in fact it represents only 9% of the reason. Of course I generalise. In hypercompetitive markets, price can be a critical factor, but for many this is not the case. If someone indicates that a proposition is 'too expensive' what he or she may actually be saying, if you read between the lines, is that you have not given sufficient justification for the price being asked. So if we focus on communicating 'what makes us special', the features and benefits of our product or service, we may move price alone to become less of an issue.
Disputes account for 14% of the reason. Within this we need to understand that the issues that cause disputes may not, in our eyes, appear severe, but it is ultimately the customer that decides, all too often 'voting with their feet'. Few will tell you - most will tell others. So again, it is imperative that we communicate with our customers, to enter into meaningful dialogue to understand and intercept these issues before it is too late and business is lost.
Read the full article here |
