Importance of Customer Retention?
What's the importance of customer retention?
Answer
Date: February 12th, 2008.Every company, even the best ones, loose customers. It's a given. To stay at the status quo, or even grow the business you need a steady supply of new customers to replace the old ones.
Now, if your business isn't good at customer retention, which is the ability to keep customers, your company is loosing a lot of customers. So you need to replace them with a lot of new customers, before you can continue to grow.
This is bad for business for two reasons:
- On average, it costs 5 times as much to get a new customer than to keep an existing one.
- Customers who have bought from you before, are much more likely to buy from you again
Yet there are so many companies that spend millions and millions to get new customers, and next to nothing to keep them. They should do an ROI (Return on Investment) comparison between the two... I know where I would put MY money! :-D
Kind regards,
Erwin.
