While companies use many customer / client retention strategies to grow their business, using a customer retention call center is one of the most effective ways to boost profits. However, when surveyed, companies consistently rank customer retention as one of their lowest priorities. Many business owners believe that the path to success is attracting new customers, but the statistics show that keeping existing customers is often a much more effective way to grow a company. Despite this, many companies are reluctant to put more effort and investment into their customer retention.
Here are some statistics to help show you how a customer retention call center in Toronto or your city can help grow your company more than any other customer retention strategy.
5 Statistical Facts about Customer Retention
Customer Retention Can Boost Profits
Customer retention pays surprising dividends. One analysis found that boosting your client retention by only 5% can increase profits by 75% while other figures have found profits to increase anywhere from 20% to 95%. As current customers are more likely to spend more money more frequently, keeping even a small portion of them can be very profitable. If you can increase customer retention by even more than 5%, you can expect an even larger profit.
Most Revenue Comes from Few Customers
Many businesses choose to view all of their customers as equal. This may be great for providing pleasant and consistent service to your customers, but the truth is that a small percentage of your customers are likely responsible for most of your business. Figures show that typically 80% of your revenue comes from 20% of your customers. Focusing on retaining these frequent spenders is a more effective strategy for increasing revenue than attracting many one-time spenders. This core group of customers can make or break your company.
Most Customers Are Displeased with Service
It’s no surprise that most companies feel as if they provide great customer service. Everyone likes to think that they are doing everything right. However, while the majority of companies rate themselves as providing superior customer service, only 8% of their actual customers agree with that evaluation. This means that most companies are actually providing worse customer service than they think and are likely losing many customers. The silver lining is that for these companies, putting even a little extra attention on customer retention should have a big effect.
Customers Prefer Better Service
For many business owners, discounts, deals, and low prices are seen as the path to more business. However, that’s not what the stats on customers suggest. Almost two thirds of customers would rather spend more money with a business that they are familiar with and that provides good customer service. Most businesses underestimate just how important customer service is and how much of a factor it plays in their customers’ decisions.
Customer Retention Is Easier
Not only does customer retention often pay off much more than attracting new customers, but it’s also a lot easier. Figures show that it is anywhere from 3 to 12 times easier to make sales off of your existing customers than new ones. If you provide a quality service or product along with good customer service, your existing customers will feel comfortable making more purchases.
As the leading provider of outsourced call center solutions, 3C Contact Services teaches its partners the necessary customer service skills, client retention strategies needed to engage and retain customers. For more information about our customer retention call center services, call us today at 1-888-353-2335.
Jao, Jerry, “Customer Retention is King: The Future Of Retention Marketing,” Forbes, January 21, 2015, http://www.forbes.com/sites/jerryjao/2015/01/21/customer-retention-is-king-retention-marketing-provides-greater-roi/.
Jao, Jerry, “Customer Retention Should Outweigh Customer Acquisition,” CMO, August 02, 2013, http://www.cmo.com/articles/2013/7/18/customer_retention.html.
Lawrence, Alex, “Five Customer Retention Tips for Entrepreneurs,” Forbes, November 01, 2012, http://www.forbes.com/sites/alexlawrence/2012/11/01/five-customer-retention-tips-for-entrepreneurs/.