Thank you to Entrepreneur for referencing us in this great article.
Every company wants to drive customer loyalty, but many neglect the fact that what customers want is community.
Loyalty is a tricky thing -- not to mention expensive when you’re trying to create it from scratch.
Everyone’s heard the oft-cited statistic that it costs five to seven times as much to bring in a new customer as retain a current one. And that may be a modest estimate: The Harvard Business Review found across a range of studies that the cost of acquiring a new customer can be as much as 25 times more costly than keeping an existing one.
Marketing Metrics, meanwhile, determined that companies have up to a 70 percentchance of making a sale to a current customer, but -- at best -- a 20 percent chance of selling to a prospect.
What's more, the financial effect of loyalty can be seen beyond sales. In Leading on the Edge of Chaos, Emmett Murphy and Mark Murphy noted that a 2 percent boost in customer retention has the same impact on a company as a 10 percent reduction in costs. The implication, then, is that keeping customers around is crucial, yet many companies seem to be failing to do so -- despite putting extra money and energy into developing better products and services.
Why this disconnect? It turns out that products and services may matter a lot less to customers than community, and that’s something most companies neglect to build.
Read the full article at www.entrepreneur.com.