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The True Cost of Losing a Customer - Blue Ocean Contact Centers - ContactCenterWorld.com Blog

The True Cost of Losing a Customer

 

One negative customer experience may seem like a drop in the ocean of all your customer interactions, but it’s never that simple. Consider these statistics from a recent survey from NewVoiceMedia:

After experiencing poor customer service:

•  37% of customers would change their supplier
•  28% would post a negative online review
•  26% would complain via social media
•  13% would tell friends/colleagues
•  10% would inform the media

It’s worth mentioning that many customer relationships can be saved even after a bad experience with the actual product or service, particularly if they choose to contact a customer service rep. But if that interaction also results in a negative experience, the customer support experience can become the straw that breaks the camel’s back.

The far-reaching impact of a damaged reputation, the lost lifetime customer spend, and the expense of winning back that customer and/or acquiring new ones add up to a significant loss – in terms of both revenue and reputation.

Calculating Lifetime Customer Value

Obviously, the cost of losing a customer isn’t as simple as the loss of one particular sale or the associated make-good. You have to assume that had that customer had a positive experience – both with your product/service and with your customer service team – they would have continued to buy from you and recommend your brand to others.

According to research, only 42% of companies are able to accurately measure lifetime customer value. This is a knowledge gap that prevents companies from comprehensively understanding the impact of a single customer on their revenue, and, in turn, how their customer experience impacts the company’s success.

If you’re ready to tackle the math, check out this post from Hubspot.

The LVT calculation can play an important role in determining the ROI of your customer care team, and specifically, the customer save team.

The Cost of Customer Retention vs Acquisition

It’s common knowledge that it can cost five times as much to acquire new customers versus retaining existing ones – and 70% of surveyed companies agree it’s cheaper to retain. Acquisition costs are seen in sales efforts, marketing, and advertising as well as customer onboarding, but it’s retention that appears to gain the most profit in return; a mere 5% increase in retention rates can garner 25-95% extra profit.

How do these statistics help us determine the cost of losing a customer? At its most basic, every lost customer creates the need to acquire a new one. And, as we can see, acquiring those “replacements” can get expensive.

A Real Life Example

A client of ours operates with entitlement contracts for their highest-value enterprise-level customers, requiring parts and labor onsite within either a two- or four-hour window (depending on contract terms) if that customer experiences an outage.

When one of our client’s customers experienced multiple cases of delays in part deliveries, the customer threatened to switch suppliers. In response, we at Blue Ocean created a 24/7 team of Subject Matter Experts dedicated to supporting this particular customer. We established separate KPIs for the team and empowered them to make decisions and take action outside of standard protocol. In addition, we collaborated closely with our client’s warehouse and logistics partners to ensure we were aligned in overcoming any obstacles that impacted on-time deliveries and feeding data upstream to prevent future delivery delays.

With this approach, results improved from an average of 71% on-time delivery to 95%+ on-time delivery rates month after month. This is an example of a company that understands how important it is to deliver outstanding service to existing customers. Their retention efforts, in this case, were complex but essential to avoid the devastating impact of losing a top tier customer with a significant LVT to the company.

Protecting Against the Cost of Losing a Customer

Losing a customer isn’t as simple as losing a single sale. The impact is far-reaching, and companies must have a thorough understanding of the extent of this cost in order to understand the true importance of excellent customer service and experience.

From a ruined reputation to a lost lifetime of sales to a never-ending cycle of replacing old customers, the cost is considerable. Are you ready to protect yourself against this expense? We’d love to chat with you about building a better customer experience.

Source: https://blueocean.ca/cost-losing-customer/

Publish Date: January 8, 2019 5:00 AM


2020 Buyers Guide Telecoms

 
1.) 
Cloud IT Services GmbH

Dialfire
Dialfire offers you a complete call center solution that is simple and intuitive to use and adapts to your needs. It's completely cloud-based, saving you the hassle of setting up a phone system and installing software. In addition to predictive dialing and call blending of inbound calls, you can create personalized campaigns through an intuitive and easy-to-use interface. Features include automated workflows and full control over the agent screen.

You can see the full list of features here:

2.) 
Cloudonix

Cloudonix
Cloudonix provides businesses with software development tools (APIs/SDKs) enabling contextual communications, using existing communications tools and workflows.
Connect your website or mobile APP directly to your call or contact center, keeping the context of who the caller is, why they are calling, and how they got to you as part of the call.

3.) 
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VOIP services
Stay in contact quickly and easily with your international offices through Megacall.

Megacall will fulfill all your telecommunication requirements and on top of that go the extra mile and surprise you with new possibilities for your business, speed to action your requests and keeping within your budget.

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PH: +34 952 667 511

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NetSapiens

SNAPsolution
Our SNAPsolution – UC and Collaboration tools – can be quickly deployed so you can realize your ROI just as quick. netsapiens offers a comprehensive suite of unified communications (UC) & Contact Center (CC) feature-sets to service providers. Custom-built to provide our partners with unprecedented levels of flexibility, customization, and ease of use.

netsapiens allows you to control your margins in order to improve your ROI. As a provider of a facilities-based solution, you are able to personally choose your origination, termination, hardware costs, etc. to fit your budget. We also allow you to strategically price your product for a maximum return on your investment by charging on a conc...
(read more)
PH: 7608463385
 



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