The Facts

• Acquiring new customers can cost five times more than satisfying and retaining current customers
• A 2% increase in customer fullservice 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 rate can increase profits by 25-125%, depending on the industry
• The customer profitability rate tends to increase over the life of a retained customer

Why Customer Retention

In today's competitive business world and challenging economy, retaining your customer base is critical to your success. If you don't give your customers some good reasons to stay, your competitors will give them a reason to leave. Customer fullservice and satisfaction drive profits. It's far less expensive to cultivate your existing customer base and sell more services to them than it is to seek new, single-transaction customers. Most surveys across industries show that keeping one existing customer is five to seven times more profitable than attracting one new one

Customer Loyalty

In highly competitive markets, there is a big difference between satisfied customers and completely satisfied - or loyal - customers. The former, if they have a choice, can easily switch to another supplier, while loyal customer would stay longer with your company and recommend its services to others. Thus you should rather be concerned than pleased if, according to your surveys, majority of your customers fall into the satisfied category. Turning them into loyal customers through building customer relationship and delivering superior value should be your prime task.