In the world of retail and restaurants, customers come and go. Losing a customer is no big deal, right? Wrong!
Making customers feel valued and heard is good for your brand and critical to your bottom line. As a site selection software provider with decades of experience in retail research, we've talked a lot about the cost of a bad location. But what about the cost of losing a customer? Unfortunately, it can be higher than you think.
Here are some startling statistics:
- The value of one lost customer can require the acquisition of three new customers (McKinsey)
- 80% of the value creation achieved by the world’s most successful growth companies comes from new revenues from existing customers (McKinsey).
- Trusted companies financially outperform their peers by up to four times, and customers who trust a brand are 88% more likely to buy again (Deloitte).
- Acquiring new customers online can cost five to 25 times more than retaining existing ones (Harvard Business Review).
It makes sense that it is costlier to find new customers than it is to keep the customers you have (and that the cost of customer dissatisfaction is high). Let’s break it down even further. What are the costs associated with finding new customers? Generally, acquiring new customers requires both time and money. That includes:
- The cost of marketing and advertising
- The time spent converting those customers from your competitors
- The time spent nurturing those customers to buy from you
- Your employees' time serving those customers (in the case of a service business)
To grow, you certainly need to continue adding new customers, but it's just as important to retain customers. And the best way to do that is to make sure they are satisfied.
Treat Customers Well for a Long-Term Revenue Stream
Satisfied customers are more likely to become repeat customers. They're often less price-sensitive because you've earned their trust and they like what you offer. They will send referrals your way too.
Here's what you need to know about retaining customers that might (or might not) surprise you:
Customers care about great service more than just about anything.
In the time since COVID, consumers have changed dramatically. Retailers have had to rethink the shopping experience to provide a smooth, convenient buying experience and drive value for customers.
However, it still stands that consumers buy from brands they respect and trust and companies that guarantee their products and services. Should problems arise, they want to know they can bring them to a company's attention and have those concerns addressed. And even during a time when many consumers are in search of the best deal, customer service is king.
In fact, Qualtrics' 2024 Consumer Experience Trends Report shares that customer service and support ranks above low prices when it comes to drivers influencing consumers' purchasing decisions. In other words, customers will pay more for a better customer experience, which is what our retail clients have consistently shared through the years as well.
Keep your customers happy, retain your credibility, and safeguard that revenue.
Unhappy customers are often louder than happy customers.
It's great when you can get your satisfied customers to share their experiences, and it's so very important in retail! According to many sources, however, dissatisfied customers rarely keep it to themselves. In fact, the White House Office of Consumer Affairs says that they'll typically between nine and 15 people about their poor experience! On the other hand, happy customers who get their problems resolved tell between four and six people. Which would you rather have?
Ask your customers often what they think.
Often, unhappy customers who have had a bad experience just disappear and never come back.
That leaves your retail business wondering what went wrong and what you could have done to salvage the relationship. We cannot stress it enough: it's vital to make the effort to understand your customers! You must address their needs, or you risk missing the mark with your product offerings and ultimately losing their business to a competitor. Bottom line: listening to customers is key to keeping them.
Customer Analysis and More
SiteSeer can help you decide where to open or build new locations when you're ready to do so. But in the meantime, put the tool to work to understand your customers' needs, desires, buying patterns, behaviors, and much more. SiteSeer can help you identify and segment your best customers, analyze customer travel patterns, and more.
Come see us at ICSC to take a demo of our powerful, versatile platform, or schedule a demo now at a time that's convenient for you!
