More than two-thirds of the customers who take their business away from a supplier do so because they think that the supplier doesn’t care about them. And most of these dissatisfied customers leave without saying goodbye—or telling you why they are dissatisfied. This means you are left to guess what went wrong. More than likely, you will continue to repeat the same mistakes and alienate still more customers.
The other truth about customers who leave is that you cannot count on them to remain silent about their dissatisfaction. They may not talk to you, but they will talk to others who are your existing or potential customers. Statistics show that dissatisfied customers tell between 8 to 16 other people. So not only do they take their business off your books, they are likely to influence others to do the same.
In considering the cost of customer dissatisfaction or lost customers, also count the costs of getting that customer and of securing another customer to replace him. As noted, that cost is substantial. Depending on how long you manage to hold onto a customer, the amount you spent to "land" him in the first place may well be greater than the profits he put on your books.
- Value of transaction X Frequency of purchase = Simple loss value
- Simple loss value X number of years of relationship = Lifetime loss
- Lifetime loss X number of people influenced = Total loss
You and your team members should take the time to calculate, as closely as possible, the actual cost involved in losing a customer. The numbers alone can provide a stark reminder of the real dollar value of good customer service. They will see that the cost of losing a customer far exceeds the immediate cost of lost revenue from current transactions.
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