Why marketers should drive customer retention harder than recruitment
In a previous article, I had written about customers’ service in Nigeria titled “Is customer service dead”? The article was inspired by the attitude of service providers, especially staff that have the first contact with customers or clients.
I had a recent experience that fascinated and at the same time gave me hope that all hope is not lost. My delivery order in a popular pizza store was muddled up and as a result there was no delivery planned as someone had forgotten to place the order. My disappointed was palpable as I spoke to the manager on the phone. I eventually visited the store to place my order and was shocked at the reception I got. Not only did they apologize for the error, they made effort to alleviate my inconvenience by giving me an extra pack of pizza and some drinks to go with it!
This was the first experience I have had of a service provider acknowledging their error and makes an effort to make things right. Though I had vowed never to patronize the store after my encounter with them; however, I left that day feeling much better than I did when I entered the store. This brings me back to a statement in my original post on customer service – “Good customer service is when a customer is left better than they did when they first came in contact with a brand or company. Irrespective of the validity of their issue, it behoves on the service provider to provide clarification and ensure that the customer feels satisfied even when such issues are unresolved”.
To the point on patronizing the company again; would I patronize them after the event? The reason for this question in the first place lays credence to the fact that customer at the end is king, they have the prerogative to determine what they would do and how they will spend their money. My answer to the question is a resounding yes – I have been there subsequently! I believe the manager went above and beyond the call of duty in my view (she actually carried the packs of pizza to my car herself) and through that won me over and made me stay with the brand. This has nothing to do with whether a free product was given or not, it is centered largely on the attitude, the language and the temperament of the manager that I interfaced with.
Consumer/customer experience speaks louder than any consumer communication campaign deployed by a brand. It is an important factor in driving retention and brand growth and can at the same time drive a brand downhill if it is not properly managed. It has been said that the singular reason for loss in customer base is poor customer service; as 68% of customers leave due to bad experience.
Why is it important to offer good service?
1. It is 7 times costlier to attract a new customer than it is to retain an existing customer.
2. 10% increase in customer retention levels result in a 30% increase in the value of the company
3. 5% increase in customer retention rates increases profits by 25 to 95 percent.
4. If online retailers retained 10% of their existing customers, they would double their revenue (Source – Bain & Company study)
While it is very important to expand the base of a brand which may involve recruiting into the category or from other brands across several demographics; it is of utmost importance to know that such effort does not compromise the retention strategies of the brand. Good customer service is the life line of any brand.
Bolajoko Bayo-Ajayi