How Good Customer Service Pays Off. We have all heard the phrase “The Customer is Always Right” We have all heard the phrase “The Customer is Always Right”

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Presentation transcript:

How Good Customer Service Pays Off

We have all heard the phrase “The Customer is Always Right” We have all heard the phrase “The Customer is Always Right” Not all businesses operate under this mantra Do you think they should?

Article: 10-15% annual loss of customers Article: 10-15% annual loss of customers Other research says it can be as high as 20-40% Other research says it can be as high as 20-40% Why? Why? Poor Service Poor Service Disappointing product experience Disappointing product experience Brand ambivalence Brand ambivalence

Only 1 in 4 customers is actually brand loyal Only 1 in 4 customers is actually brand loyal Most customers are ambivalent and can either stay or migrate to a competitor Most customers are ambivalent and can either stay or migrate to a competitor Factors that can affect loyalty: Factors that can affect loyalty: Relation of price and quality Relation of price and quality Customer service offered Customer service offered Significance of product Significance of product Status associated with brand Status associated with brand

Reducing customer loss by just 5% can potentially increase revenue by as much as 85% Reducing customer loss by just 5% can potentially increase revenue by as much as 85% How? How? Don’t have to pay to attract those customers again Its much more expensive to attract new customers

Northwestern University's Center for Retail Management reports: Northwestern University's Center for Retail Management reports: 12-15% of a company's most loyal customers contribute % of total sales 12-15% of a company's most loyal customers contribute % of total sales

1.Why is customer loyalty so important? 1.Why is customer loyalty so important? 2.If it is so important, why do so many companies spend the bulk of their advertising dollar to get new customers rather than retain current customers? 2.If it is so important, why do so many companies spend the bulk of their advertising dollar to get new customers rather than retain current customers? 3.What are the keys to an effective customer loyalty program? 3.What are the keys to an effective customer loyalty program?