Why is losing a customer such a bad thing? The answer is simple: losing a customer translates into losing money. The sad truth is that businesses spend a lot of money to acquire new clients. They create ads, they try out new marketing strategies, and they use call centers and email newsletters to try to achieve their goal. But should getting a new customer be their ultimate goal? No. Getting a new customer is only half of the battle. It is also imperative to invest in keeping the existing ones.
According to the latest research, it costs five times more to obtain a new customer than to keep an old one. Ask yourself the following question: how do you acquire new clients? It’s probably through heavy advertising or promotions. Those cost money, right? Thus, retaining customers is certainly something you should focus on.
Here is another striking figure – about 95% of people do not inform brands about negative experiences they’ve had; they simply go away. Moreover, people who were treated badly are more inclined to talk about it. They will spread the word to another20 people on average. Just imagine how many people would hear something negative about your brand if this happened. A happy customer, on the other hand, uses communication channels to tell approximately five other people about a positive experience.
The real cost of losing clients
Losing 100 clients and then trying to acquire the same number of new ones can translate into tens of thousands of dollars wasted. The lost recurring business from the customers who left can also be a hefty amount. And these are merely numbers, which don’t even touch on other negative outcomes such as the drop in employee morale and harm to your company’s image. These factors are not reflected by the numbers, yet they still cost a lot of money as well.
Thus, as you can see, poor client service translates into the loss of real money. This is what happens if you manage a business without paying sufficient attention to your customers and customer service.
All of the abovementioned points lead us to the conclusion that customer service should be a business’s main objective. The truth is, however, that the majority of organizations do not even calculate the worth of a client and do not realize how impressive these figures are. They simply treat them as the cost of doing business. The cost of losing a client should be summed up along with the cost of the other previously mentioned aspects which are difficult to measure in money.
Taking all of these factors into account, we can conclude that the cost of poor customer service quality can reach up to 40% of sales profit. You need to realize what a huge impact that is and how expensive it is to lose a customer and start acting now. Do everything possible to put client service at the core of what you’re doing. Data will help you. How many customers do you lose on a regular basis? How many loyal customers do you have? In the long run, if it costs so much to lose a customer, why aren’t you doing everything in your power to avoid it?