What You Don’t Know about Customer Loyalty Can Hurt You

Operations

April is Customer Loyalty Month. In today’s social media driven world, it seems like everything has its own month. In fact, April is also Frog Month and Straw Hat month. So, you might be thinking, what makes Customer Loyalty Month so important? If you’re a business owner or manager, you already know that customer loyalty is critical to the success of your business all year long. Think of April as the perfect time to make sure your staff thinks the same way.

According to the The American Customer Satisfaction Index, customer satisfaction with retail is down for the first time in four years. As consumers become more value-conscious and accustomed to online shopping, they’re even harder to please in the real world. Low tolerance for things such as long lines, untrained employees, and hard-to-find products leads to customers who don’t make a purchase, or worse, never come back

Don’t worry, it’s not all bad news. Brick-and-mortar stores like yours have a unique opportunity to appeal to what consumers are missing in their click-to-buy lives: human interaction, the key to customer loyalty.

Customer Loyalty by the Numbers

Take a look at these important statistics about customer loyalty:

  • Only about 4% of dissatisfied customers complain. 96% just go away. (Harris Interactive Customer Experience Improvement study)
  • It costs 6 times more to attract a new customer than it does to keep an old one. (Ruby Newell-Legner)
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%. (Emmet Murphy and Mark Murphy)
  • Americans typically tell 24 people about negative customer service, but they only tell about 15 people about positive experiences. (American Express Global Customer Service Barometer)
  • A 5% increase in customer retention increases profits up to 125%. (Bain & Company)
  • The probability of selling to an existing customer is 60-70%. The probability of selling to a new one is 5-20% (Marketing Metrics)
  • 68% of customers leave because they think you don’t care about them (Rockefeller Corporation)

All these numbers add up to one thing: Customer loyalty has a direct impact on your profits. Take care of your customers, and they’ll take care of you.

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