Losing Customers is Costly

The numbers don’t lie

Improving customers’ satisfaction with your business translates directly to your bottom

line. If you are not sure you are ready to invest in improving service, check out these

statistics:

• It costs between five and six times more to attract a new customer than to keep an

existing customer.

• Companies can boost profits from 25 percent to 125 percent by retaining 5 percent

more existing customers.

• Only one out of 25 dissatisfied customers will express dissatisfaction to you.

• Happy customers tell at least four others of a positive experience. Dissatisfied

customers tell as many as 12 about a negative experience.

• Two-thirds of customers do not feel valued by those serving them.

• Acquiring new customers can cost five times more than satisfying and retaining current

customers.

• A 2 percent increase in customer retention has the same effect on profits as cutting

costs by 10 percent.

• The average company loses 10 percent of its customers each year.

• The customer profitability rate tends to increase over the life of a retained customer.

Sources: Extreme Management, Mark Stevens, 2001; Leading on the Edge of Chaos, Emmett C. Murphy and Mark A. Murphy, 2003 This is an oldie but goodie, but I’m pretty sure these numbers are still relevant.  The bottom line is losing customers is very costly to a business.