It is much less expensive to keep loyal customers than it is to tempt new ones to a business. Research shows that attracting new customers costs roughly six to seven times greater than the amount to retain current business. Satisfied customers are those who become devoted buyers when a company has proven itself to be trustworthy. Further research indicates that a 60 to 70 percent chance exists of existing customers returning to make purchases in the future.
Successful customer service programs need to focus on the excellent treatment of customers. This includes answering questions and exceeding their expectations. An approach like this to customer service helps businesses build strong relationships with their customers as the company engages them.
Loyal customers are prone to providing positive endorsements, writing online reviews that help a business to strengthen its brand. Loyal customers, on average, are worth ten times more than the value of their initial purchase. Research indicates that many people make purchasing decisions only after receiving recommendations from their family and friends.
Reduces Employee Turnover
Employees prefer to work for those businesses that show appreciation for worker contributions while encouraging new ideas and treating customers fairly. People that work for employers with great customer service are more engaged in work, becoming advocates for the business. When the business sees challenges or changes in the economy, such workers are willing to endure with the company that has made them loyal.
Prevents Business Failure
Roughly 96 percent of businesses in the United States shut down within a span of 10 years. Among the contributing problems is the dilemma of poor customer service. Buyers first grow frustrated over a small problem; when it is not addressed, the small problem snowballs. Problems such as unclear communication, poor follow-through on questions, and ignored requests all turn customers away.