Research Findings on the Importance of Creating a Customer-Focused Culture was first published by Ray Miller in Nov 2009.
Every month we scan as much of the Customer Focus, Service Excellence and Customer Experience Research as we can to make sure we have our fingers on the pulse of what customers and business leaders are saying and thinking. Here is a short summary of what current research is revealing. It’s not listed in any order as it is all important!
- 80% of companies believe they deliver a superior Customer Experience; however, only 8% of their customers agree.
This represents a significant difference in perception and since it is the customers’ perception that drives their buying behaviour, this is pretty scary.
- Beyond price and product quality, your customers value how they are treated. Only 12 -14% of customers leave for product reasons while 68% leave because of poor treatment by employees.
To make matters worse, most of your customers do not complain about poor service because they don’t think it will do any good.
- Only 4% of unhappy customers ever complain; 90% do not bother to complain and simply go elsewhere.
Your customers are looking for maximum value when spending their hard-earned cash, particularly in this economy.
- Depending on the report you look at, from 85% to 95% of senior business leaders believe that the next competitive differentiator is Customer Experience.
The customer experience requires the active participation of everyone in your organization. Creating and implementing a comprehensive Customer Focus strategy will differentiate your business.
- In this market, Companies are losing at least half of their “satisfied” customers.
“Satisfy” means providing nothing more or less than the customer expects. Customers want to deal with those who demonstrate that their business is valued. Creating a Customer-Focused Culture is a proven strategy for both short-term success and long-term growth.
- The average value of customers is 8 to 10 times their initial purchase depending on the research we have reviewed. The cost to attract a new customer is 5 to 6 times more than your cost to save an existing customer.
Keeping your existing customers is cheaper and more profitable than getting new ones. Yet most companies are focusing their marketing efforts on obtaining new business, sometimes at the expense of their existing customers.
- The cost of poor service ranges between 25% to 35% of your operating expenses.
Aligning internal processes and ensuring every employee understands how he or she contributes to the customer experience will reduce the cost of poor service. Why not move the total of these expenses from your expense journal to your operating profit.
- Low customer focus companies average a 1% Return on Sales and lose 2% market share a year. High customer focus companies average a 10 -12% Return on Sales and grow 5 – 6% a year.
Customer Focus is a profit strategy.
- A 5% increase in customer loyalty will contribute between 25% and 125% directly to your bottom line.
I’m repeating myself but Customer Focus is a profit strategy.
So now you have seen the numbers. What are you going to do?
Forgive the rhetorical question but the data seems to be quite compelling. Now is the best time to start creating your customer focus strategy and fast track its implementation. If you have seen our article, Customer Focus in a Slow Economy, you’ll see why the time to act is now.
Enhance your Customers’ Experience and sharpen your Customer Focus to differentiate your organization and build long-term loyalty and profitability. If you need help, check out our book, That’s Customer Focus!: The Overworked and Under-appreciated Managers Guide to Creating a Customer-Focused Organization. Everything you need know and do to create and implement your strategy is covered in this great book.
Ray Miller is the Author of That’s Customer Focus! and The Customer Focus Companion and Managing Partner of The Training Bank
The Training Bank is a full service training and development firm which specializes in fully customizable Leadership, Customer Focus, Service Excellence, Management and Supervisory Development training.
Please explore our web site and discover how we can be of service.