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"You don't know what you've got till it’s gone"

Written by: Cyril Dunworth

Article Overview: In times like these it becomes even more important than ever to hold on to our existing clients. Everybody knows the costs of customer acquisition. Here are some helpful hints

"You don't know what you've got till it’s gone"

Some commentators have said that it costs up to 10 times as much, some have suggested even 20 times, to find a new customer than it does to retain an existing one. Whatever the true figure, one thing is clear, in the current and future economic conditions it makes sense to hold on to all the customers you have worked so hard to win before you start looking for new ones.

So how do you hold on to a customer and why do people leave you? Well the latter is pretty easy to explain and, once more, there is much documented evidence around. What is clear is that customers rarely leave you because of price. In fact anything up to 85% of your customers may not be price sensitive at all. Around 10% will leave you for a competitor’s offer, however 70% will leave you if you are perceived to be indifferent to them and their needs. The message is clear – if you want to maximise customer retention then the priority areas for action are:

Maximise customer service excellence across the business; know what your customer wants and deliver it.
Build relationships with your customers; people like to buy from people they like.
Clearly understand your price/value proposition, USPs and guarantees offered.
Know your competitors and their product ranges.
Customer loyalty is the key. Harvard studies show that increasing customer loyalty by just 5% can increase profitability by a full 25%.

So what not to do? Evidence also shows that cutting prices is almost always folly. Margins fall and so much new business is required to replace lost revenue it is almost impossible in a recessionary market to recoup what you have discounted away.

So don’t lose your customers for any reason. Don’t let a ‘big yellow taxi’ or anything else for that matter take any of them away. Thanks Joni!

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Article Tags: big yellow taxi, commentators, competitor, customer loyalty, customer retention, customer service excellence, economic conditions, folly, guarantees, harvard studies, joni, margins, new business, one thing, priority areas, profitability, relationships, true figure, usps, value proposition



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Re: Does a New Company need a "Big" PR firm? - I agree with SHri, it really depends on the target audience and how much service you really need. if you are doing National campaign than you want a firm that has the National contacts. Lots of smaller companies dont have as many resources or connections. Many firms are going to a pay for performance model which I think will do the PR and advertising industry good. no more $5000 retainers for sending out a couple of press releases - no matter how well written or targeted! if they dont get picked up, they dont get paid. J
Re: help wanted in u.k. - Hi Brendan, Please dont apologize for feeling like you dont know or understand enough business. At least you know you have some things to learn and are willing to do that. One of the best things you can do write now is start studying business plans and learning about market research. You can find some amazing resources online and at the library. Before you spend the money on a patent you can be gathering crucial data and testing the viability of the product. One of my favourite resources is a book called "The Art of the Start". Guy K. (I dont know how to spell his last name). You can also visit a local enterprise centre/business centre. I'm sure you have one close by. They can help you on a personal level to know what steps to take to start. good luck. We are here - we just need to know how to best help. Thanks for writing back!
Re: Who did your logo design? - There are indeed a ton of those logo sights where you can get cheap work done. I have an inhouse design studio called Ripple, where we offer start up packages for business for $500. I think a lot of new entrepreneurs dont realize the impact that their logo does have on their branding and positioning. We take people through a complete creative process which I know they value. By using the $25 sites etc. you really have no claim on them if they do infringe on someone else idea.. But hey...to each his own.. I like to think that you get what you pay for - and while I dont think you need to spend thousands...you should research and really understand what you are getting into. Your logo needs to be something you can use for 5-10 years at least.....so it has to include your big vision..
The Pasta Express - ha haa haa. I thought it was only me! Thanks everyone for clearing that up. I usually consider myself a good shopper and someone who does their due dilligence. Every once in a while though, I see one of those ads and think, that is just what I need. Thanks to the As Seen on TV store at some malls, I can now really check them out before I buy. One thing I will say, the cancellation policy and return policies for these products are great! I realized that they count on the fact that most people think the return policy will be cumbersome so they dont bother to do it. Just like gym memberships! Less than 30% of people that have a gym membership dont go. But only 3 -5% actually go through the process to cancel the automatic withdrawal from their account. Sadly this doesnt say much for our laziness as human beings! Jude
Re: Does a New Company need a "Big" PR firm? - [quote="TheRainmaker":23enhep1]I agree with SHri, it really depends on the target audience and how much service you really need. if you are doing National campaign than you want a firm that has the National contacts. Lots of smaller companies dont have as many resources or connections. Many firms are going to a pay for performance model which I think will do the PR and advertising industry good. no more $5000 retainers for sending out a couple of press releases - no matter how well written or targeted! if they dont get picked up, they dont get paid. J[/quote:23enhep1] Those retainers were insane and from a lot of people I talk with, the company really wasn't earning it at all. Other firms earned every penny, but its easy for some people to get comfortable doing as little as possible and still taking those retainers. Pay for performance can help make people "hungry" - when they are "hungry", then tend to be more motivated. Shri


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