Monday, August 4, 2008

Importance of Retaining Customers During Recessions

In this article from Customer Think, Phil Dourado provides tips on how to keep customers when times are tough. When the economy is experiencing problems, it becomes imperative for organizations to retain their customer base and foster loyalty. Dourado mentions 6 main points on why this is so important that he has collected from a variety of sources.

1. Cutting service problems increases profit - "1% cut in customer service problems could generate an extra £16m in profits for a medium size company over five years."

2. Keep the ones you've got - "It can cost six times more to buy new customers than retain existing ones."

3. Service leaders are more resilient in a downturn

4. Your bills get paid

5. Reducing customer defections improves profits

6. What did we say in Number 5? Here it is again - Points 1, 2, 5 and this one are all about keeping the customers you have and not losing them. Also bear in mind that in an economic downturn it’s far easier to win market share from the competition, so becoming defensive-minded is not always a sensible strategy.

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