We are all familiar with the 80/20 rule – 80% of your revenue can be contributed to 20% of your customers. But did you know that according to a study by Bain & Company, increasing customer retention rates by just 5% increases profits by 25% to 95%?

And it’s much less expensive to keep a customer than acquire a new one – 82% of companies agree that retention is cheaper to execute than acquisition, according to an eConsultancy report.

Web

So just how customer-focused are you? Being customer-focused is not a one-size fits all solution, but here are 3 things you should be doing today to make the customer the center of your universe – or at least the center of your business.

1. Who is Your Customer?

This may seem relatively straight-forward, but do you really know who your customers are? Many marketers are so focused on metrics such as email opens and click-thru rates, that they forget about the driving force behind these metrics. Their customers. Why did the customer click on your email in the first place? Was it the subject line, the time of day, a special incentive? What channels do they use to engage with your brand? Do they read your emails on smartphones or do they look to engage with you on social media sites?

By understanding who your customers are, how they engage with you, and what they value, you can deliver better customer experiences. And good customer experiences are key to keeping your customers loyal.  62% of global consumers have reported switching service providers due to poor customer service experiences.

2. Are You Social?

For many consumers, social media has become a first resource for complaints and questions. Traditional customer service centers are no longer enough to keep your customers satisfied. Consumers expect to be engaged by companies when asking a question or posting a complaint. One study by NM Incite found that nearly half of U.S. social media users actively seek customer service through social sites. Prompting attention to customer complaints, questions or comments on social sites provides a great opportunity to build better customer relationships with social followers.

3. Do You Personalize Your Communications?

Today’s consumers expect to have personalized interactions with companies. This includes both offline and online communications. While people prefer to be greeted by their first name versus “Dear Customer”, personalization goes well beyond this, such as personalized recommendations when shopping on-line based on past purchases or triggered emails when it’s time to purchase a new mattress.

In a study by Forrester, most marketing personalization utilizes customer preferences (80%) and purchase history (68%). In the future, more marketers plan to incorporate social sentiment (79%) and customer emotion (53%).

In today’s age, the customer rules. And just to give you further convincing, check out some of these compelling statistics:

  • 70% of customers will do business with you again if you resolve their complaints.
    (Ruby Newell-Legner)
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%.
    (Leading on the Edge of Chaos, Emmet Murphy and Mark Murphy)
  • The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. (Marketing Metrics)
  • 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back. (1Financial Training services)
  • A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people.(White House Office of Consumer Affairs.)

Better understanding your customers, their needs, and challenges keeps more of your customers loyal, and ultimately improves the bottom line. To learn more about increasing customer retention through positive customer experiences, read our customer experience guide.