Written by Amy Rowe
Since finding new customers is an expensive and time consuming process it seems to make sense to do your best to hold on to your existing ones. A recent study from the Harvard Business School quantifies the value of your existing relationships. For example:
- The probability of selling services to a prospective customer is 1 in 16, while the probability of selling services to a current customer is 1 in 2
- A 2% increase in customer retention has the same effect on profits as cutting costs by 10%
- The average company loses 10% of its customers each year
- A 5% reduction in customer defection can increase profits by 25 to 125%, depending on the industry
- A customer’s profitability rate tends to increase over the life of a retained customer.
So what are you doing to hold on to your customers, to keep them comming back, and bringing friends along as well?
Thanks to Deb Daily at Buckaroo Technology – She shared these statics in her monthly newsletter so I didn’t have to find them myself. It helps to have smart friends!