The Importance of Repeat BusinessHow Good Customer Service Pays Off

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

Why Should We Care?• Article: 10-15% annual

loss of customers

• Other research says it can be as high as 20-40%

• Why?

• Poor Service

•Disappointing product experience

• Brand ambivalence

Customer Loyalty• Only 1 in 4 customers is actually

brand loyal• Most customers are ambivalent and

can either stay or migrate to a competitor• Factors that can affect loyalty:•Relation of price and quality•Customer service offered•Significance of product•Status associated with brand

Increase The Bottom Line• Reducing customer loss

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

Why Do We Want Loyal Customers?

• Northwestern University's Center for Retail Management reports:•12-15% of a company's most loyal customers contribute 55-70 % of total sales

Loyal Customers

15%

Total SalesLoyal Cus-tomersOther Cus-tomers

70%

Exit Ticket1. 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? 

3. What are the  keys to an effective customer loyalty program?