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What Is The Customer Worth To You?

Lisa Ford 12-17

All companies love the idea of keeping their customers loyal. They survey to assess satisfaction, create slogans to inspire and make promises to attract customers. However many have efforts and strategies underway that are roadblocks to loyalty. These roadblocks could be more easily removed if you put a monetary figure on loyalty. Increased revenue gets attention and can get “buy-in” from across the organization. Few are willing to do the hard work to make it happen.

In a recent Dow Jones Report, General Motors Co. stated that for each percentage point of improvement in customer retention rates, $700 million will be gained in additional revenue. The auto industry typically retains about 52% of its customers when time to purchase a new vehicle. GM’s retention rate is right on target with the average. Think what being above average could do for your bottom line.

Here are some thoughts to consider:

1. Do you know how much your customer is worth on an annual basis?

2. How much would be added to the revenue if you kept 1% more of your customers?

3. If you know the answers to the last two questions, does everyone in the organization have them committed to memory?

4. What strategies, processes and attitudes deter the customer from being a retained customer?

It may be hard to calculate the numbers but the work is worth it. Numbers sell others on seriously moving forward with customer focused efforts. As stated earlier, few do what it takes to deepen customer loyalty.

Do a quick assessment from your own experience as a customer – when have you received a “thank you” or show of appreciation from your insurance agent, payroll provider, mobile phone company and many others. My guess is the answer is not enough and not often.

Go run the numbers and share the value of a retained customer. Get moving on strategies to make it easy for customers to remain loyal. Loyalty is fragile and fleeting. Don’t give them a reason to leave you.



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