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Joe Calloway
Published: Wednesday, October 21, 2009 - 05:30
The Acme Widget Co. needed to increase revenue and profits, so they undertook an initiative to attract new customers: They launched a new advertising campaign and offered special deals to first-time buyers. They were initially delighted to see a significant and immediate increase in new customers. Their joy was short lived, however, as they saw revenue and profits actually decline.
The Acme Widget Co. made a classic business blunder. As new customers came in the front door, existing customers were leaving in greater numbers through the back door. They had violated one of the most important rules of business: Never take your customers for granted.
Even a small reduction in customer defections can significantly increase profits. Because your fixed costs don’t change much regardless of how many customers you have, the retention of existing customers is vitally important in maximizing profit. Creating and strengthening customer loyalty must be a top priority of any business if it is to grow and prosper.
Merely “satisfied” customers won’t cut it in today’s marketplace. Countless studies have shown that satisfied customers will defect in a heartbeat if they think they can get a better deal somewhere else. You’ve got to create completely satisfied customers whose loyalty can’t be swayed no matter what your competition offers them.
Following are 10 essential tactics to keep customers loyal:
In a business environment in which margins continually shrink, the competition gets better, and customers become smarter and more demanding every day, the fight to retain customers becomes critically important to your success. While always working to grow through the acquisition of new business, never let your focus waver in terms of keeping the customers you’ve already got.
Remember that customers tend to leave because they didn’t like the human side of doing business with a provider of a product or service. Be sure that you are competitive with price and quality, and always be vigilant about that human side of doing business. Maya Angelou spoke a great truth with the following words: “People will forget what you said. People will forget what you did. But people will never forget how you made them feel.”
Quality Digest does not charge readers for its content. We believe that industry news is important for you to do your job, and Quality Digest supports businesses of all types. However, someone has to pay for this content. And that’s where advertising comes in. Most people consider ads a nuisance, but they do serve a useful function besides allowing media companies to stay afloat. They keep you aware of new products and services relevant to your industry. All ads in Quality Digest apply directly to products and services that most of our readers need. You won’t see automobile or health supplement ads. So please consider turning off your ad blocker for our site. Thanks, Joe Calloway is a partner in Engage Consulting Group, and author of several best-selling business books including the newly revised edition of Becoming a Category of One, (August 2009, Wiley). Corporate heavyweights BMW, American Express, IBM and many more have sought his insight into today’s marketplace. Calloway provides consulting to help companies accelerate their strategies and make their visions reality. To purchase his books or hire him as a consultant, visit www.joecalloway.com or call (615) 383-2249.10 Steps to Keeping Customers Loyal
The human side of doing business may be soft science but it yields solid results.
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Joe Calloway
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