How Important Is Customer Loyalty?

Today’s best-in-class organizations know that delivering world-class customer service is no longer a value-add, but a must. After all, it’s impossible for a company to survive without its customers. Still, some believe that great service is just too costly, so they do the bare minimum. But, what these businesses fail to understand is that poor customer service actually costs more. How much more exactly? According to data aggregated from KISSmetrics, globally, the average value of a lost customer is $243. Is it even more costly for your organization?

If the value of a lost customer is $243 or more, what’s the value of a loyal customer? The answer: priceless. While turning existing customers into lifelong brand proponents isn’t easy, the payoff is certainly worth the money, hard work, and effort. Besides keeping your churn rate low, loyal customers:

Pay more: Typically, loyal customers are less price-sensitive as they appreciate the overall quality and value your company provides and are willing to pay for it. Whereas, new customers are more much price conscious. Moreover, dedicated customers often increase the number of purchases they make. According to research from FiveStars, loyal customers spend 10 times more over their lifetime. 

Cost less: It’s a well-known fact that the cost of acquiring a new customer far outweighs the cost of keeping an existing one. And the probability of selling to an existing customer is much greater than selling to a new prospect. Bottom line is loyal customers cost you less in the long run.

Spread the word: The majority of consumers today rely on word of mouth and their peers for brand recommendations. Loyal customers are more likely to rave about your company to their friends, family, and coworkers, which could bring in additional revenue. In fact, VIP and loyalty program members are 70 percent more likely to spread the work about your business, according to the same research above.

Instead of asking what they can do to replace lost customers, businesses should be asking what they can do to turn existing customers into lifelong, loyal brand proponents. The first step is delivering unmatched customer service.

Good customer service in the contact center is typically an organization’s first line of defense. A poor first impression can leave a sour taste in a customer’s mouth, while a seamless and trouble-free interaction will keep them coming back. But delivering first-rate service day in and day out isn’t always easy.

Using your customer experience optimization solution, contact center mangers can gather the right data from customer interactions to quickly identify necessary improvements, as well as schedule the right people in the right place at the right time. These steps tremendously help service customers faster and more effectively. What’s more, they can ensure agents have the proper training and tools to handle any customer concern or answer any question on the first interaction. And when customers are happy, so is your company.

If you don't have a customer experience optimization solution, we invite you to look at Envision's. Make 2019 a year where you increase customer loyalty and decrease customer churn and help your contact center improve operations. We hope you enjoyed this blog and please know we are here to help just reach out to us at www.envisioninc.com.