With customer service central to almost every company, it is essential that businesses keep their existing customers happy while also trying to reach new customers.

Despite this importance, many companies are not getting their customer service right. While 80 percent of businesses believe they are providing good customer service, only 8 percent of customers agree, suggesting companies still have a lot of work to do when it comes to providing quality customer service.

Customer churn can end up costing your business a lot of money, especially when trying to attract new customers. In fact, it is five times more costly to attract new customers than it is to retain your current ones.

With businesses losing 50 percent of their customers every five years, companies are challenged to find the right incentives to retain customers.

What’s more, new customers can be incredibly picky. The likelihood of getting a new sale from a customer is between one-in-five and one-in-20, making it very hard to attract return business. New accounts will also end up costing companies 133 percent more to sell to, compared to an established client.

Unhappy customers can also leave your business struggling to win over customers. Sixty-eight percent of dissatisfied customers didn’t make a repeat purchase because of poor customer service, while it takes 12 positive experiences with a brand to make up for a single negative one.

Although these are real challenges affecting businesses, there are some positive signs for companies. Improving customer retention rates can dramatically increase revenue, creating increases of between 25 and 125 percent.

In particular, loyalty programs are an effective tool for increasing positive customer awareness, with participants 70 percent more likely to tell others about the company than non-members, as highlighted in the infographic below.

 

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