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Customer Satisfaction


Keeping Your Customers

By Martin Gateshill with John Lavelle of Visual Accounts


Let me ask you a question. What is it that makes your customer decide to purchase from you?


I hope you know the answer, it will be different for each of you and it's something every business needs to understand in order to flourish.


Just as important though is another question which, chances are, you won't know the answer to... What is it that makes one of your customers STOP buying from you?


Too many businesses depend upon their ability to generate new customers and fail to realise the dramatic impact on their bottom line if they could just stop losing the ones they already have!


Don't get me wrong, winning new customers is vital and no matter what you do you will lose customers. Every business does. What you need to do is limit this loss. There are enormous business payoffs if you do. Even if you win more customers than you lose, you are still missing out on a major growth opportunity.


Why?, because on average every company will churn approximately half of their customers every five years. So there is enormous room for improvement. Bain, the American Consulting Group has demonstrated that if you can hold on to an extra 5% of your customers every year you could double your profits!


It's vital to keep your existing customers as well as winning new ones because;

  1. It costs a lot less to retain a customer than find a new one.
  2. Loyal customers know you and your service and don't always put price first, whereas new customers often do.
  3. Loyal customers usually place larger orders.

So what is the secret to keeping your customers, how do you discourage them from defecting to the opposition, and how do you persuade others like them to buy more?


To begin to understand this we must know why customers defect?

The most important reason is indifference to complaints.


Approximately 96% of unhappy people will not tell you that they are unhappy. They just stop buying.


Worse than that, they will tell between eleven and twenty other people that they are unhappy with you. Only about 4% will complain to you, so you must have systems in place to "maximise the customers' opportunity to complain."


So your strategy should be to make sure you are listening to your customers. Contact them regularly. When they order, ask if there is anything else you can do for them. Send out questionnaires about the service they are receiving. Conduct "Satisfaction surveys". Most importantly, take swift action to resolve the complaints and criticism.


What proportion of complaining customers would probably buy from you if you dealt with their complaint efficiently and effectively?


Believe it or not it's an amazing 95%.


Philip Kotler of Northwestern University, claims that, of all the customers who register a complaint, between 54% and 70% will do business with you again if their complaint is satisfactorily resolved. The figure climbs to a massive 95% if the customer feels that the complaint was resolved quickly.


If you can effectively and efficiently deal with complaints you can retain about 80% of your complaining customers. What is more, customers who have had their complaint satisfactorily resolved will tell, on average, 5 people about the treatment they have received.


So the secret to keeping your customers is simple, listen to your customers, communicate regularly and deal efficiently and effectively with any issues they may have.

Martin Gateshill is an On and Off line business Veteran trading successfully since the early 90's. Visual Accounts is an accounting package he helped to design that does a lot more than just count your money!


To find out more about Visual Accounts go to


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