Customer Churn and Burn? We think not.
“You are what the scoreboard says you are.”
—famously said by Bill Parcells, who paraphrased it from Vince Lombardi
What’s your scoreboard? Understanding how your business scores (grows) or is defeated (atrophies) is largely determined by the experience your customers perceive. This ultimately leads to customer retention or attrition. An epiphany to some, it should be the guiding principle for all businesses.
Providing what you perceive as an exceptional customer experience is the first step. But understanding what your customers actually experience is the critical test.
The question has always been: How?
There are three pieces of information you need to calculate customer retention:
Number of customer at the end of a period (E)
Number of new customers acquired during that period (N)
Number of customers at the start of that period (S)
Without becoming a math wonk, the important thing to understand is that customers leave without notice and new customers appear. That means that while your revenue may be flat or showing slight growth, the crucial question is: “Are you gaining new customers at a pace greater than losing current customers?”
You never want to lose customers, so you need to be aware of key facts surrounding retention and attrition:
It’s six times the cost to attract a new customer than to keep an existing one.
44% of companies have a greater focus on customer acquisition than retention (18%).
90% of companies see the customer experience as a key factor in customer retention.
42% of companies are able to measure customer lifetime value accurately.
70% of companies know that selling to existing customers is likely, while only ~10% is likely to a new prospect
5% customer retention equals a profit increase of 25-95%.
What happens if you fail to provide positive customer experience? Simple: Customers will be frustrated. And customer frustration leads to churn.
According to Esteban Kolsky, 72% of customers will share a positive experience with six or more people.
But if customers are not satisfied:
13% of them will tell 15 or even more people that they are unhappy.
67% of customers will mention the bad experiences as a reason for their contribution to churn.
But only one out of 26 unhappy customers complain.
Clearly, it’s imperative to retain customers while in the process of gaining new ones. To retain existing customers requires the ability to measure their satisfaction or dissatisfaction, in context.
Tapyness provides THE platform for hassle-free feedback.
To further these points, an alliance of Tapyness (TRACX) in this article states “The primary takeaway for businesses that serve these customers should be to uphold a unique, friendly, and efficient experience for all customers. To deliver this, businesses must continue to focus on capturing customer feedback at key touchpoints and across the entire customer journey.”