Strategic Planning: Focus on Your Most Valuable Customers - dummies

Strategic Planning: Focus on Your Most Valuable Customers

By Erica Olsen

Most companies lose about 25 percent of their customers every year for a variety of reasons. As you build a strategic plan, recognizing that you’ll lose customers is important, yet maintaining existing clients instead of acquiring new ones is substantially cheaper. With this in mind, organizations get trapped in a continuous cycle of trying to fill a leaky customer bucket.

Here are two reasons for customer leaks:

  • Businesses spend a disproportionate amount of money trying to keep all their customers happy.

  • Businesses try to hold on to every customer, which isn’t statistically possible, while constantly seeking new customers and neglecting their best customers.

How can you stop your customer bucket from leaking? The key is to focus your time and money on the 75 percent of the customers who’re likely to stay with you and are profitable.

Do you need more convincing to keep your current customers happy? Check out these statistics from The Center for Customer Focus that just may persuade you:

  • For every one complaint, there are 26 silent or dissatisfied customers.

  • Your buyers aren’t complaining; they’re just not buying from you.

  • Sixty-three percent of silent customers will switch suppliers.

  • Unsatisfied customers will express their dissatisfaction to at least nine other people.

  • Roughly 65 percent of customers are dissatisfied because of the feeling of indifference (everything from a bad attitude to not returning an e-mail) by someone at the company.

  • Your loyal customers will tell three other people about how great you are.

If you take the preceding list of statistics into account, you just eliminated 25 percent of your most valued customers. Only 75 percent remain, which may be thousands of customers, depending on the size of your organization.